The existing pandemic is most likely to shape customer considering and consequently effect buying behaviour, and the all round consumption development is most likely to get delayed by up to two years, stated a report by Boston Consulting Group.
The household consumption is going to be negatively impacted more than 2020 and 2021, it stated.
“Our consumer income and expenditure model suggests that total household consumption spending is likely to reach Rs 290-300 trillion (three hundred thousand crore) by 2030-similar to our initial pre-COVID estimates for 2028,” stated BCG report.
The typical annual household earnings is anticipated to rise to about Rs 7.3 lakh by 2030, practically 40 per cent larger than it is today but 7-8 per cent decrease than pre-COVID estimate. “Over the last decade, household consumption in India grew 13 per cent year-on-year to reach Rs 120 trillion in 2019. This saw an increase across categories with the highest growth in services like health, education and leisure, indicating the changing lifestyle and preferences of consumers, and the rise of many new to the world categories,” stated the BCG report.
In the coming decade, this sturdy development trajectory was anticipated to continue on the back of 4 crucial pillars-Affluence (sustained rise in typical household incomes), Attitude (constructive sentiment towards the economy and private economic circumstance), Awareness (due to enhanced connectivity, travel, and media), and Access (each digital and physical). However two of these variables, namely Affluence and Attitude, have been impacted by COVID. This will lead to 3 crucial shifts in how India spends. It additional stated there are most likely to be some brief-term shifts in the shape of consumption expenditure. Rural consumption has been comparatively resilient via the pandemic, but the trend is unlikely to sustain more than the extended-term. “With the proportion of high-income households getting widely distributed across approximately 100 cities in the country, the contribution of tier II, III and IV cities (all with populations below 1 million) to the consumption boom is likely to increase,” stated the report titled ‘How India Spends, Shops and Saves in the New Reality’.
The consumption patterns in the nation are at present undergoing a deep transformation, a single that is providing birth to exclusive challenges and possibilities for firms. “Companies looking to gain consumer’s trust and capture their share of the consumption spend should focus on re-designing their existing strategies,” it stated.