About two-third of Indian consumers say they will be cutting back on their non-essential spending in the face of the current economic climate, according to a survey by PwC.
74% of Indian respondents say they are concerned about their personal finance situation, as opposed to 50% globally, the 2023 PwC Global Consumer Insights Pulse Survey shows. About 20% Indian consumers plan to stop all non-essential spending.
The survey also found most Indian consumers expect 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 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, says PwC.
This comes at a time when consumers globally are weighed down by concerns around cost of living and personal finances.
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% of them are very concerned about their financial situation, says Ravi Kapoor, partner and leader - Retail & Consumer, PwC India.
"This sentiment will have a potential restraining effect on spends in highly discretionary categories of electronics and luxury," Kapoor says.
"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," he adds.
Indian consumers plan to adopt an array of cost-saving behaviours over the next six months to reduce the potential impact of inflation on their personal finances, according to the survey.
Nearly 47% of Indian consumers say they will shop with retailers that offer free or discounted product delivery, and 45% say they will buy certain products only when they are on promotion or when there is a special offer. They also plan to shop with retailers that offer better value, buy in bulk, sign up for subscription services, switch to cheaper brands and even go without a product they use regularly.
Half of the Indian consumers (50%) say 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%), along with product availability (28%), which is also impacting consumer behaviour.
In order to reduce their costs, more Indians want to increase online shopping – around 61% say they plan to shop online more often over the next six months. 41% say they will increase purchases from retailers that provide an efficient delivery or collection service.