Uncertainty about coping with rising living costs is driving over 80% of Indians to save more money
Uncertainty about coping with rising living costs is driving over 80% of Indians to save more money
According to an EY report, a majority of Indian consumers are optimistic about their financial situation over the next year but have expressed concerns about rising costs of goods and services affecting their purchasing decisions.
Additionally, uncertainty about how to cope with rising living costs is prompting over 80% of Indians to save more money, according to the ninth edition of the EY Future Consumer Index for India.
The index for India reiterates the “positive outlook” of Indian consumers as 77% expect positive changes in the financial situation over the next year. This is better than their global counterparts, which are at 48%, the report said.
However, the survey, conducted in February among more than 1,000 Indian consumers, “raises concerns about the rising cost of goods and services affecting their ability to buy and their purchasing decisions,” it said.
“Emerging markets are feeling the effects of the crisis severely, with 62% of respondents saying affordability influences their decisions (South Africa 77%, India 64%, Brazil 63%, China 42%) compared to 45% of respondents from developed markets (Dec US 50%, Canada 52%, UK 42%, France 40%),” EY said in a statement on the report’s findings.
In India, this affects the low-income group the most (72%), followed by the high-income group at 60% and the middle-income group at 58%, it said.
“Uncertainty about coping with rising living costs is driving over 80% of Indians to save more money than in the past, with 50% of all respondents already making it a goal to save rather than spend,” it says .
In addition, health and wellness remain the focus and Indian consumers are willing to pay a premium for quality and organic food, even amid inflationary pressures.
“More than half (54%) of respondents in India have a physical health and well-being goal for the next 2-3 years. 80% of Indian respondents are more cautious about physical health in the long-term, followed by mental health at 78%,” EY said in the report.
Angshuman Bhattacharya, partner and national head of EY India – consumer goods and retail sector, said experience-seeking consumers are less loyal and with increasing price sensitivity and an inflationary environment, companies have to work harder to retain them.
“This prompts FMCG companies to look at their revenue and margin waterfalls and cut spending across the value chain to increase profitability,” it said.
Consumer priorities have shifted to a better self and environment in the wake of the pandemic, he said.
“This change in behavior will drive purchasing decisions in the long term. Consumers are becoming increasingly environmentally conscious and are demanding that the brands they sell show values consistent with their own.” The EY Future Consumer Index tracks changing consumer sentiment and behavior across time horizons and global markets and identifies the emerging consumer segments.
The 9th edition of the EY Future Consumer Index surveyed 18,000 consumers in the US, Canada, UK, France, Germany, Australia, New Zealand, Japan, China, India, Brazil, Saudi Arabia, Denmark, Sweden, Finland, Norway and Indonesia , Italy, Spain, Mexico, South Africa, Chile (new), Argentina (new) and Thailand (new) between January 28 and February 15.
