Consumers globally are weighed down by concerns around cost of living and personal finances. Around 74 per cent of Indian respondents say they are concerned about their personal finance situation, as opposed to 50 per cent globally.
63 per cent 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 per cent of the respondents were male and 43 per cent 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 per cent 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.”
Key trends emerging from the survey results:
Cost of living weighs on consumer confidence
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 per cent) 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.
Supply chain disruption is shifting in-store/online consumer behaviour
Half of the Indian consumers (50 per cent) 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 per cent), along with product availability (28 per cent), which is also impacting consumer behaviour.
Luxury/premium product industry to see decline in consumer spend
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 per cent), virtual online activities (32 per cent), consumer electronics (32 per cent) and fashion products (clothing and footwear) (31 per cent).
However, there remains an appetite for future spend, with 38 per cent indicating they will look to treat oneself/others, whereas 54 per cent view them as better quality. Travel (30 per cent) and groceries (21 per cent) had the least reported planned spend reduction.
Vocal for local (Sustainable products are in demand from consumers)
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 per cent are willing to pay higher for a product that is produced/sourced locally, or made from recycled, sustainable, or eco-friendly materials (87 per cent), or produced by a company with a reputation for ethical practices (87 per cent).
Metaverse: Early-stage adoption strong, executives recognise the importance of risk management, cyber security and governance
Adoption of the Metaverse as a shopping channel is still in its early stages, however, the medium remains under-utilised, with only one-quarter (23 per cent) of Indian respondents familiar with the term. The largest portion of these users have primarily employed the Metaverse for virtual reality (VR), i.e., playing games or watching a movie (20 per cent), experiencing the virtual world through the retail environment or a concert (13 per cent), or purchasing a digital product, such as a Non-Fungible Token, or NFT (17 per cent). Millennials (36 per cent) are most likely to use the Metaverse, especially in countries like India (48 per cent), Vietnam (43 per cent), and Hong Kong (42 per cent).
All the while, as online shopping continues to grow in volume, 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 per cent), healthcare (59 per cent), and consumer companies (58 per cent).
As a result, 41 per cent respondents do not share more personal data than they must, 37 per cent opt-out from receiving communications from these companies, and 38% have overall reduced their interaction with these types of companies.