"Over 50% consumers continue to have negative outlook on future income": BCG report

Boston Consulting Group (BCG) recently unveiled the COVID-19 Consumer Sentiment Research, which is based on a global survey covering both developed and emerging markets. It will be fielded in waves to provide a longitudinal view of consumer sentiments about the Coronavirus pandemic, and about consumer consumption outlook.

BCG COVID-19 India Consumer Sentiment Survey is focused on Wave 3 in the country, which was fielded from April 30-May 3, 2020; covering 1,300 SEC A and B respondents in metros, Tier 1 & Tier 2 cities.

According to this survey, despite lockdown relaxations, concerns across health, economic situation and daily lifestyle continue at similar levels. The consumers are still pessimistic about future income, spends, and loan repayments. Over 50 per cent of the consumers continue to have a negative outlook on future income. Over 40 per cent think they will cut back on spends in the coming six months. Eighty-five per cent are worried about servicing loans post moratorium.

But it is important to take a de-averaged view – segmenting both consumers as well as categories. The concerns are much higher among younger consumers, SEC B households and small business owners. Even among categories, essentials, at-home entertainment, health and insurance continue to show greater resiliency, while travel, OOH entertainment, apparel, large ticket purchases have emerged as categories with significant reductions. As many as one-third of the consumers in many of these categories are also likely to trade down to cheaper brands, or cheaper variants in the same brands.

The report says that the current situation has also triggered a significant push towards digital adoption. Many consumers are trying out digital in shopping/payments/media for the first time. There have been 20 per cent additional new users reading news online, 40 per cent new users shopping staples online, and 20 per cent new users using digital wallets.

It also suggests that, in general, the consumers don't think the removal of restrictions is a good signal of things being under control. Over 50 per cent of the consumers believe that availability of vaccine and containment of cases are the strongest indicators that the virus is under control, while only around 24 per cent associate that with the removal of restrictions. In terms of recovery, local retail and commute are likely the first ones to come back to normal. Sixty per cent of the consumers will take at least a few months to come back to normal (post things are under control) in case of restaurants/movies, while it's 80 per cent for flights and hotels.

Read the full report here.