Consumer anxiety is at the highest levels since the outbreak of coronavirus pandemic in India with the less affluent most skeptical about economic outlook while a majority of consumers think their income in the next six months will be lower than the pre-COVID levels, says a latest study.
As per the COVID-19 consumer sentiment research by global management consulting firm Boston Consulting group (BCG) conducted between May 23 and May 28, 2021, covering around 4,000 respondents across metros, tier I, II, III, IV and rural India, 51 per cent of consumers expected their spends over the next six months to be lower.
In the last round of survey conducted from July 20 to August 2, 2020, the figure stood at 40 per cent.
As many as 83 per cent of the respondents agreed that coronavirus posed a high level of threat to their jobs or businesses, while another 86 per cent felt that there would be an economic recession due to the pandemic.
In terms of income outlook, 58 per cent of the respondents expected a decline in income in the next six months, the study said adding the decline in income sentiment is the steepest among less affluent/small towns.
It found that 76 per cent of respondents in the 'struggler/next billion' category expected income lower than the pre-COVID level, while the same was also true for 60 per cent in the 'aspirer' segment. However, only 49 per cent 'affluent/elite' expected decline in income in the next six months.
The less affluent were also the most skeptical about economic outlook, although health concerns were prevalent across consumer profiles. The impact of the pandemic on daily lifestyles were felt more in urban/affluent India, the study said.
Consumer spending sentiment for essentials, health, at-home entertainment has remained stable or showed minor decline. On the other hand, the expected cutbacks on travel, out of home entertainment and vehicle purchases are high, it added.
Commenting on the findings, BCG India Managing Director and Partner Nimisha Jain said, "There is an impending sense of uncertainty, however, we have observed certain positive messages too." The spending sentiment has not been impacted similarly across categories. Essentials, health, in-home entertainment continue to be winners. Some of the discretionary categories, however, have been negatively impacted, she added.
The pandemic has also resulted in the unabated growth in adoption and engagement of social commerce and healthier food choices, while sustaining at new highs the adoption and engagement of digital commerce, entertainment and education, BCG said.
"Now that we have been in the crisis for over a year, the shape of a new normal for consumer behavior is also beginning to emerge. Many of the newly adopted behaviors ranging from social commerce, online shopping, digital content/ payments - have continued to stick," BCG India, Centre for Customer Insight Lead Kanika Sanghi said.
However, others like 'do it yourself' regimes, online doctor consultations have shown high sensitivity to the pandemic situation, Sanghi added.
The BCG study also found that there has been a significant increase in the willingness to take vaccines post the second wave - especially in small towns and rural areas which had shown high levels of hesitancy/ indifference earlier.
As many as 78 per cent of the eligible consumers in large towns said that they were very willing to take the vaccine now - compared to 62 per cent earlier. The same percentage for rural areas stands at 63 per cent now compared to 41 per cent earlier, it said.