90 percent of Indian consumers were subjected to a change in personal spending behavior starting from the onset of the pandemic, according to the ‘Consumer Spending Sentiment Index Report’ by InterMiles.
The report, which showcases payment, purchasing, and personal finance trends including shifting consumer spending patterns, is on the basis of responses received from more than 11,500 InterMilers customers across India.
Experts conclude that the pandemic has had a major impact on the economy – not only bringing about a change in spending capacities, but also a shift in consumer priorities and renewed caution with regards to purchasing.
In accordance with the survey by InterMiles, over 90 percent of Indian consumers witnessed a change in their personal spending behavior after the pandemic, with a mere 10 percent reporting no change in their spending behavior.
Given the uncertainty and suddenness of the global pandemic, the report also says, about 70 percent of Indians have now aware of securing the future by increasing investments and savings.
Spending priorities have also changed according to the report, with 21 percent of consumers increasing spends on essential products, while non-essential spending saw a negligible (3 percent) growth post the advent of the pandemic.
The report states, expenditure on essential goods and services like food products and healthcare saw a substantial increase by 45 percent and 38 percent respectively. Yet remained the same as before.
Besides that, non-essential spending saw a deep decline with consumer spends decreasing on travel (68 percent), entertainment (52 percent), and apparel (45 percent).
There was also a rise in social commerce, voice-activated shopping and contactless payments. The pandemic and the subsequently imposed lockdown gave rise to massive changes in consumer shopping behavior, with over 74 percent of survey respondents stating an increase in the use of online shopping portals. In accordance with the report, the company said this can be attributed to the distinct need for contactless services as consumers looked to minimize touchpoints that could lead to a viral transmission.
The survey also threw light on the relatively new, but sure shift to social commerce, with as many as 40 percent of consumers stating that they now use social media channels like Facebook and Instagram more frequently for shopping. The company declares, this instant content to commerce behavior is anticipated to revolutionize the marketing ecosystem in the country, while also allowing SMMEs increased visibility at low costs.
Further, the report states 31 percent of respondents said that their usage of digital voice assistants like Alexa and Google Home, for shopping, increased through the course of the pandemic.
The report also concludes that 70 percent of consumers have changed payment preferences post the outbreak of the pandemic. Solidifying the contactless payments behavior, consumers have switched preferences from cash to either card (26 percent) or UPI and e-wallets. Given the increasing penetration of smartphones and ease of usage, UPI is the clear choice for the evolved Indian consumer, according to the report with over 44 percent of consumers stating that they’ve started utilizing UPI services even more than cash and cards.