43% Indians have unfavourable sentiment on future spends: BCG report

Despite relaxations in the nation-wide Lockdown, concerns across health, economic situation and daily lifestyle continue at similar levels. Consumers are still pessimistic about future income, spends, and loan repayments. Over 50 per cent consumers continue to have a negative outlook on future income. Over 40 per cent consumers think they will cut back on spends in the coming six months. 85 per cent consumers are worried about servicing loans post moratorium.

This was revealed in Boston Consulting Group’s (BCG) new report, titled Indian ‘Consumer sentiment amid Covid-19’. Part of a global survey, this COVID-19 consumer sentiment document is focused on Wave 3 in India, which was fielded from April 30-May 3, 2020, covering ~1,300 SEC A and B respondents in Metros, Tier 1 & Tier 2 cities.

According to the study, the concerns are much higher among younger consumers, SEC B households and small business owners. Even among categories, essentials, at-home entertainment, health and insurance continue to show greater resiliency, while travel, OOH entertainment, apparel, large ticket purchases emerge as categories with significant reductions. As many as one-third of the consumers in many of these categories are also likely to see consumers trading down to cheaper brands or cheaper variants in the same brands.

The current situation has also triggered a significant push towards adoption of digital. Many consumers are trying out digital in shopping/ payments/ media for the first time. There have been 20 per cent additional new users reading news online, 40 per cent new users shopping staples online, and 20 per cent new users using digital wallets.

In general, it is emerging that consumers don't think removal of restrictions is a good signal of things being under control. Over 50% consumers believe that availability of vaccine and containment of cases are the strongest indicators that the virus is in control, while only around 24% associate that with removal of restrictions. In terms of recovery, local retail and commute are likely the first ones to come back to normal. ~60 per cent consumers will take at least a few months to come back to normal post things are under control in case of restaurants/ movies while the same number is ~80 per cent for flights and hotels.