Weighed down by concern around cost of living and personal finances, 63 per cent of India consumers are cutting back on non-essential spending altogether. According to a survey by PwC, most Indian consumers are expected to reduce their expenditure across all surveyed categories over the next six months, which is a significant decline in planned spend across all categories since the previous survey in June 2022.
The 2023 PwC Global Consumer Insights Pulse Survey captured the views of 9,180 consumers across 25 territories. In India, it included 500 Indian respondents across 12 metros, tier-I and tier-II cities of India (Mumbai, Delhi-NCR, Bengaluru, Visakhapatnam, Chennai, Kochi, Kolkata, Nagpur, Jalandhar, Hyderabad, Meerut and Rajkot). Around 74 per cent of the Indian respondents said that they were concerned about their personal finance
In the next six months, PwC maintained, industries including luxury and premium products, travel, and fashion are expected to see the greatest reductions in consumer spending, whereas the groceries segment is expected to witness the least decline.
Key consumer trends
With consumers concerned about their personal finance, they are shifting their consumption habits in-store and online. “Around 45 per cent of them say they are buying certain products when on offer/promotion, 44 per cent are looking to retailers offering better value, 38 per cent are using comparison sites to find cheaper alternatives, 36 per cent are buying in bulk to save cost, and 33 per cent are buying retailers’ personal brands for better savings,” the report said. With consumers looking for world-class buying experience, brands will needs to reduce costs, enhance availability and offer more ‘local products’.
Further, consumers are also planning on reducing their spending across all retail categories over the next six months with 38 per cent of them to decrease spending on luxury/ premium or designer products, 32 per cent to decrease spending on virtual online activities, 32 per cent on consumer electronics and 31 per cent of them would decrease spending on fashion products (clothing and footwear). However despite a planned spend reduction amid a challenging economic environment, consumers are still willing to pay more for sustainable products and locally produced/ sourced products.
Further, adoption of metaverse as a shopping channel is also picking up. Even as consumers are adopting metaverse and online shopping, consumers are increasingly weary of data privacy. “65 per cent of respondents are extremely or very concerned when interacting with social media companies, third-party/portal travel websites (54%), healthcare (59%), and consumer companies (58%),” said PwC.
