Indian consumers to keep spending

18 May 2009

NEW DELHI: Two-thirds of Indians plan to maintain their spending levels over the next year according to a study by the Boston Consulting Group, which also states that many consumers in the country remain unaffected by the recession.

The company reports that 66% of Indians will not reduce their expenditure, while the remaining 34% plan to decrease their outlay by around 10%.

Abheek Singhi, a partner and director of BCG India, argued that the "impact is going to be higher in some categories" than others, including apparel, cosmetics, travel, leisure and entertainment.

By contrast, the mobile and telecoms sector, healthcare, education and fresh food are all areas in which people are still "willing to spend more."

Similarly, most "most sub-categories in FMCG", including detergents and soaps, should see revenue levels hold up over the next 12 months.

This is largely due to strong spending levels in rural areas, which account for 50% of category revenues, and house many Indians that have, thus far, been "completely unaffected by the downturn."

Recent research from Nielsen also found that 56% of Indians expect the recession to end in the country within the next year.

Over 60% also rated their own economic prospects to remain "excellent" or "good" over this period.

However, two-thirds of its respondents are looking to save any spare money rather than spend it, and only 3% think it is currently an "excellent" time to purchase goods, compared with 37% arguing it was a "good" period in which to make purchases.

Data sourced from Business Standard/Nielsen; additional content by WARC staff