Urban Indian consumers are likely to cut spends on discretionary items such as restaurants, movie theatre visits, luxury brands or leisure travel in the coming months.

According to an online survey conducted by Nielsen India during April 10-14, (with sample of 1,330 respondents across 23 cities), 64 per cent of the consumers said that they intend to spend less on restaurant and movie theatre visits. Nearly 54 per cent of the respondents said they will decrease spends on automobiles, luxury brands and leisure travel, while 43 per cent said they may defer spending more on fashion, personal grooming and home decor. Meanwhile, 42 per cent of the respondents said they will spend less on tobacco and alcohol products.

Sameer Shukla, West Market Leader-South Asia, Nielsen Global Connect, said: “Consumers have become cautious due to the Covid-19 pandemic and will be bearish on discretionary spends once normalcy is restored in the coming months. They will focus their spends more on health and hygiene facets and focus on financial security is expected to drive behavioural shifts. At the same time, technology will be a key catalyst for convenient and enhanced consumer experience.”

Over 55 per cent of the respondents said they would focus more on purchasing personal hygiene and safety products, while over 56 per cent of the consumers surveyed said they will increase spends on healthy, organic food, medical needs, fitness and mediclaim. Spends on education (47 per cent) and increased focus on investments across financial instruments (41 per cent) also figures high on their priorities.

Meanwhile, 39 per cent of the respondents stated they intend to increase online shopping by more than 20 per cent, while 64 per cent of them said OTT platforms, Wifi connections have been integral to get through the lockdown.

Nielsen India has identified three key accelerators which will fast-track long term consumer behaviours in the coming months This includes consumers seeking greater assurance in products they buy are free of risk and of the highest quality when it comes to safety standards and efficacy.

“Hand sanitisers touched its highest ever value growth of 340 per cent vs year ago in March’20, similar growth was seen for hand wash and floor cleaners with 60 per cent and 24 per cent growth respectively in overall trade,” it said. Similarly, the demand for immunity products such as Chywanprash, branded honey, and turmeric shot up in modern trade stores in March reflecting this consumer trend.

Rise in adoption of enhanced hygiene protocols with various actions such as wearing face masks and using hand sanitisers also reflects this trend. “Use of face masks and handwash as prescribed is being practised almost universally by urban Indians. Some of these consumer behaviour shifts will have a far-reaching impact,” Shukla added.

The other key accelerator has been the rise of local brands or challenger brands. According to Nielsen India, as many as 152 new brands entered in the hand sanitiser segment grabbing 46 per cent value share in March. “This indicates that in the current scenario, availability and quality of product is more important over brand choice where supply mechanism is severely compromised,” Nielsen India stated.

In addition, tech accelerators, will play a big role in shaping supply and demand scenarios in the future. “Nearly 57 per cent of corporate leaders talked about more focus on e-commerce channel as top priority in the next 12 months,” Nielsen added.

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