Indian consumers are gearing up for the festive season, especially Diwali at the end of October, but a recent nationwide survey provides a mixed picture for retailers and FMCG brands in the months ahead.
LocalCircles, a community-based social network, last week released the findings from its annual Mood of the Consumer Survey, which confirmed that consumer sentiment is rather gloomy at present.
Amid concerns about the economic outlook, the survey of 22,000 adults (64% men and 36% women) revealed that nearly half (46%) have reduced their spending on discretionary purchases over the past 45 days.
These include 32% who said they were spending less, while 14% were not spending at all, with a further 41% reporting that they were spending the same as before and 11% spending more.
LocalCircles concluded this signalled that consumers want “to hold on to the cash in case things continue to worsen”, adding that “this is evident in the numbers reported by auto, FMCG and various other sectors”.
However, on a more positive note, it appears this trend is set to change once the festive season begins because most consumers (as a household) intend to loosen their purse strings.
Asked how much their households plan to spend in the next 60 days towards the festive season, 43% said they would spend up to Rs 10,000 (US$140) on just festive basics, while 31% said would spend between Rs 10,000 and Rs 50,000 (US$700). Just 4% said they plan to spend over Rs 50,000, while 17% said they will spend anything.
“With all the slowdown news around, these numbers seem to be the silver lining suggesting that many consumers may be back in the market in the month of October,” the report said.
Of those planning to spend more than Rs 50,000 this festive season, home renovation was the priority for nearly a third (29%), followed by white goods (18%), cars (12%) and “gadgets”, such as smartphones or laptops (12%).
Close to two-thirds (62%) of those consumers who plan to buy white goods or gadgets said they intend to do so in a physical store, but in a sign of how quickly e-commerce is advancing, some 27% said they would shop online for these products.
“This indicates that a sizeable number of consumers this year may be shopping on e-commerce as opposed to offline retail. This may also be due to the fact that, with the slowdown, increased number of consumers feel that they may get a better bargain online as compared to retail stores,” the report concluded.
Sourced from LocalCircles; additional content by WARC staff