In close to nine months of the pandemic, many consumers are yet to recover from the steep fall in their personal finances facing job loss, salary cuts and delays. 68% consumers said their household savings declined in the last 8 months during the COVID-19 pandemic. As per the responses, 28% voted “reduced by 50% or more”, while 25% voted “reduced by 0-25%”, a survey by community platform LocalCircles has revealed.
The survey further showed that 48% of consumers plan to spend, starting from the minimum amount of Rs 1000 extending up to Rs 50,000 on purchasing discretionary products or assets in the next 4 months. 10% households plan to spend over Rs 50,000 on discretionary purchases in the next 4 months while 21% households plan to spend between Rs 10,000-50,000 in this period. Demand in sectors like travel, tourism, home renovation and repairs took a significant hit during this period as many remained locked in houses and were reluctant to get any home renovation work done due to fear of the virus, LocalCircles says. Similarly, most families did not undertake travel by air, train or road due to lockdowns and spread of COVID-19.
As far as the spending behaviour of consumers who plan to definitely purchase discretionary products or assets is concerned, 35% of consumers voted “home renovation and repairs”, 14% each voted “whitegoods and appliances” and “travel”, 12% voted “smartphone and gadgets”, respectively. This shows that home renovation and repairs, whitegoods and travel are the top areas where consumers plan on spending in the coming 4 months.
Notably, 61% consumers see their household income declining for the financial year April 2020 to March 2021. Individual data suggests, 31% voted, “lower by over 25% than last year”, 27% voted “lower by 5-25%”, while 25% voted “it would be the same as last year.”
With the economic recovery seen in the last 3 months, there is clearly a rise in optimism and 15% fewer households now expect their FY 20-21 earnings to decline in comparison to last year, the survey showed. While for the majority of the households, the earnings this year will be lower than last year, LocalCircles says.
A total of 44,000+ responses were received from citizens across 302 districts of India. 62% respondents were men while 38% were women.
“India’s daily caseload, which had almost hit 60,000 cases in September, is down to approximately 50% of that as cases start to decline in many states. Experts believe that once India starts vaccinating the most vulnerable, i.e. healthcare and frontline workers, the senior citizens and those with comorbidities, the daily caseload and the spread of COVID-19 will significantly decline. All of this is expected to help the Indian economy get back on its growth trajectory and keep consumer demand strong in FY 2021-22,” LocalCircles says.