Tatsat Chronicle Magazine

Indian Consumers Cutting Back On Non-Essential Spending, Says A PwC Report

April 6, 2023
Consumers_Retailers_International Brands
Picture for representational purpose. Photo: Wiki Commons

Consumers globally are weighed down by concerns around cost of living and personal finances. Around 74% of Indian respondents say they are concerned about their personal finance situation, as opposed to 50% globally.

Sixty-three percent of Indian consumers are cutting back non-essential spending altogether, according to the 2023 PwC Global Consumer Insights Pulse Survey, which captured the views of 9,180 consumers across 25 territories.

In India, the survey included 500 Indian respondents across 12 metros, tier-1 and tier-2 cities of India (Mumbai, Delhi-NCR, Bengaluru, Visakhapatnam, Chennai, Kochi, Kolkata, Nagpur, Jalandhar, Hyderabad, Meerut and Rajkot). Out of these, 57% of the respondents were male and 43% were female.

The survey also found most Indian consumers expecting to reduce their expenditure across all surveyed categories over the next six months, a significant decline in planned spend across all categories since the previous pulse survey in June 2022. Industries, including luxury and premium products, travel, and fashion, expect to see the greatest portion of consumer spend reductions over the next six months, whereas the groceries segment is expected to decline the least.

Sharing insights from the survey, Ravi Kapoor, Partner and Leader – Retail & Consumer, PwC India said: “PwC’s latest Global Consumer Insights Survey for India drives home the key message of ongoing financial stress in the lives of the consumers, where 75 percent of them are very concerned about their financial situation. This sentiment will have a potential restraining effect on spends in highly discretionary categories of electronics and luxury. Consumers will continue to demand world-class buying experiences in both physical and digital channels with work cut out for brands to reduce costs, enhance availability, and for ‘going local’. The silver lining here remains the unequivocal growths in adoption of digital channels and the desire to spend more on travel in the coming months.”

Consumers, globally, are shifting their consumption habits in-store and online as the cost-of-living surges and supply chain disruptions impact product availability and delivery times. As a result, almost half (45%) say they are buying certain products when on offer/promotion, 44% are looking to retailers offering better value, 38% are using comparison sites to find cheaper alternatives, 36% are buying in bulk to save cost, and 33% are buying retailers’ personal brands for better savings.

Half of the Indian consumers (50%) said rising prices remain the most frequently experienced issue when shopping in-store, supply chain issues also dominate with larger queues and busier store locations (35%), along with product availability (28%), which is also impacting consumer behaviour.

Consumers are planning to reduce their spending across all surveyed retail categories over the next six months, with the greatest decrease forecast in luxury/premium products or designer products (38%), virtual online activities (32%), consumer electronics (32%) and fashion products (clothing and footwear) (31%). However, there remains an appetite for future spend, with 38% indicating they will look to treat oneself/others, whereas 54% view them as better quality. Travel (30%) and groceries (21%) had the least reported planned spend reduction.

Despite a planned spend reduction and a challenging economic environment, consumers say they are still willing to pay more for sustainable products. Overwhelmingly, more than 88% are willing to pay higher for a product that is produced or sourced locally, or made from recycled, sustainable, or eco-friendly materials (87%), or produced by a company with a reputation for ethical practices (87%).