According to an EY survey, the majority of Indian consumers are optimistic about their financial status in the coming year, but are concerned about growing costs of products and services, which is influencing their purchasing decisions. Furthermore, according to the findings of the ninth edition of the EY Future Consumer Index for India, worry about managing rising living costs is prompting over 80% of Indians to save more money. The Index for India confirms Indian consumers’ “good outlook,” with 77% expecting favourable developments in their financial status in the next year. This is higher than their global peers, who are at 48%, according to the research.
”Emerging markets are feeling the pinch strongly, with 62 per cent citing ‘affordability’ affecting their choices (South Africa 77 per cent, India 64 per cent, Brazil 63 per cent, China 42 per cent), compared with 45 per cent of respondents from developed markets (the US 50 per cent, Canada 52 per cent, the UK 42 per cent, France 40 per cent),” said a statement from EY on the findings of the report.
However, the survey which was conducted over 1,000 Indian consumers in February 2022, ”raises concern over the rising cost of goods and services that is impacting their ability to purchase goods and is affecting their purchasing decisions,” it said.
In India, this impacts lower-income earners the most (72 per cent), followed by the high-income group at 60 per cent, and the middle-income group at 58 per cent, it said. ”Uncertainty around managing rising living costs is driving over 80 per cent in India to save more money than in the past, with 50 per cent of all respondents have made it a goal already to save rather than spend,” it said.
EY India Partner & National Leader – Consumer Product and Retail sector Angshuman Bhattacharya said experience seeking consumers are less loyal, and with increasing price sensitivity and an inflationary environment, companies would need to toil harder to retain them. ”This calls for FMCG companies to look at their revenue and margin waterfalls and squeeze outspends across the value chain to drive profitability,” it said.
Moreover, health and wellness continue to be the focal point and Indian consumers are willing to pay a premium for high quality and organic food, even amidst inflationary pressure. ”More than half (54 per cent) of the respondents in India have made physical health and wellness a goal for the next 2-3 years. 80 per cent of the Indian respondents shall be more cautious about physical health in the long-term, followed by mental health at 78 per cent,” the report said.
The consumer priorities have shifted to better self and better environment, post-pandemic, he said. ”This behavioural change will drive the buying decision in the long-term. Customers are getting increasingly environmentally conscious and are asking the brands that sell to them, to demonstrate the values that align with their own.” The EY Future Consumer Index tracks changing consumer sentiment and behaviours across time horizons and global markets, identifying the new consumer segments that are emerging.
The ninth edition of the EY Future Consumer Index surveyed 18,000 consumers across the US, Canada, the UK, France, Germany, Australia, New Zealand, Japan, China, India, Brazil, Saudi Arabia, Denmark, Sweden, Finland, Norway, Indonesia, Italy, Spain, Mexico, South Africa, Chile (new), Argentina (new) and Thailand (new) between January 28 and February 15, 2022.
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