More than 50% of those surveyed said they had started investing more in saving instruments post-pandemic; close to 70% of the respondents across all age groups in India are concerned about their future finances as against 49% globally, KPMG said in its 2020 ‘Me, my life, my wallet’ India survey findings.
“The unexpectedness, scale and severity of the global pandemic has led to increased anxiety about personal finances. Especially for youths who are making a foray in the job market, lack of prior work experience (and, therefore, savings) combined with a severely compromised economic outlook makes their situation particularly precarious. More than 85% of respondents are likely to stick to their savings plan even with a 10% fall in their income indicating the saving sentiment,” KPMG said in its report.
KPMG surveyed 2,164 respondents across urban and semi-urban markets over several phases including a pre-covid phase between February and March 2020, another survey was conducted in September 2020. In addition, KPMG conducted an online survey of 1,191 respondents during January and February 2021.
The pandemic has brought about significant shifts in global consumer behaviour. In India, the current surge is manifesting in different ways, prompting Indian households to scrimp on discretionary expenses as they focus on essentials and save up for any unexpected medical expenses.
On Monday, the Reserve Bank of India, in its monthly bulletin said, “The biggest toll of the second wave is in terms of a demand shock-loss of mobility, discretionary spending and employment, besides inventory accumulation, while the aggregate supply is less impacted.”
KPMG said its findings observed similar saving sentiments and spending patterns running across tier-1 and -2 cities.
“Close to 75% of tier-1 city responders and 63% of tier-2 responders gave more priority to their future finances over current finances, indicating the saving sentiment across all city segments,” it said.
Consumer sentiments have been changed manifold over the past few months in the current scenario, said Harsha Razdan, partner and head, consumer markets and internet business, KPMG in India.
“Our study reveals that a new consumer is now at the forefront—one that is financially and socially conscious, tech-savvy, and insightful. Hence, companies will now need to work with data-led insights rather than intuition-based strategies, integrate technology platforms across the front, middle and back offices and build strategic alliances within the ecosystem,” he added.
As consumers find ways to manage household budgets and lower up-front costs, shared economy is on the rise with new share or rent models being preferred across categories such as clothes, mobiles, electronics, and cars, according to the report.
Millennials and Generation Z are most comfortable sharing or renting clothes and mobiles, while 60% of them are comfortable sharing or renting cars.
“Indians, across all ages, have quite easily become conversant with video calling, net banking, online grocery shopping, and streaming platforms. This was not a purely urban phenomenon, as the increase in digital sophistication of the older cohort was observed in smaller towns across India as well,” according to the report.
Razdan said that the landscape in Bharat or small-town India seems to be dynamically changing as our survey indicates payment preference tilted towards digital for most cities including tier-2 and -3 cities post covid-19.
The report also mapped digital purchase behaviour among consumers—younger age groups, it said are more willing to trade privacy and personal data in exchange for better service and personalization, while an older cohort of respondents is reluctant to share data easily.
Over 80% of all respondents expect personalised customer service with Generation-X (age 37-53) forming the majority age group (88%). Only 33% of all respondents are comfortable sharing data with companies in lieu of better customer experience and personalisation, as against 15 % for the US and 10% for the UK. Around 67% of the respondents are uncomfortable with brands that track digital activity for greater personalisation while 47% are willing to pay a premium for data privacy.
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