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Indian consumers cut back on spending amid rising cost of living: PwC

10 Apr '23

3 min read

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Insights

Consumers in India are concerned about rising costs of living, according to a PwC survey.
In India, 74 per cent of respondents were worried about their personal finance situation.
63 per cent are cutting back on non-essential spending.
Adoption of the metaverse as a shopping channel is still in its early stages, with millennials most likely to use it.

The cost of living continues to weigh heavily on the minds of consumers in India and worldwide, according to a PwC Global. The survey, which included 9,180 consumers across 25 territories, found that 50 per cent of respondents globally were concerned about their personal finance situation, rising to 74 per cent among Indian respondents. Furthermore, 63 per cent of Indian consumers are cutting back on non-essential spending, with planned spend reductions across all surveyed categories expected over the next six months.

Luxury and premium products and fashion were the categories expected to see the greatest reductions, as per 2023 PwC Global Consumer Insights Pulse Survey.

Consumers are changing their consumption habits in response to rising costs and supply chain disruptions, with 45 per cent saying they buy products on offer, 44 per cent seeking retailers offering better value, and 38 per cent using comparison sites to find cheaper alternatives.

Supply chain issues are also impacting consumer behaviour, with 50 per cent of Indian consumers saying rising prices were their biggest concern when shopping in-store, followed by larger queues and busier store locations (35 per cent) and product availability (28 per cent).

Despite planned spend reductions, consumers still prioritise sustainable products, with 88 per cent willing to pay more for products produced locally, made from recycled or eco-friendly materials, or produced by a company with a reputation for ethical practices.

The survey also found that adoption of the metaverse as a shopping channel is still in its early stages, with only 23 per cent of Indian respondents familiar with the term but have not used it in 2022. The largest portion of these users have primarily employed the metaverse for virtual reality (VR); joining a virtual world, that is, experience a retail environment (13 per cent); or purchasing a digital product, such as a non-fungible token or NFT (17 per cent).

Millennials (36 per cent) were most likely to use the metaverse, particularly in India (48 per cent), Vietnam (43 per cent), and Hong Kong (42 per cent), as per the survey.

Consumers are increasingly concerned about data privacy when interacting with social media companies and consumer companies. As a result, 41 per cent of Indian respondents say they don’t share more personal data than they have to, 37 per cent opt-out from receiving communications from these companies, and 38 per cent have overall reduced their interaction with these types of companies.

“PwC’s latest Global Consumer Insights Survey for India drives home the key message of ongoing financial stress in the lives of the consumers, where 75 percent of them are very concerned about their financial situation. This sentiment will have a potential restraining effect on spends in highly discretionary categories of electronics and luxury. Consumers will continue to demand world-class buying experiences in both physical and digital channels with work cut out for brands to reduce costs, enhance availability, and for ‘going local’. The silver lining here remains the unequivocal growths in adoption of digital channels and the desire to spend more on travel in the coming months,” said Ravi Kapoor, partner and leader—retail and consumer, PwC India.

Fibre2Fashion News Desk (DP)

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