Global: Will the rising cost of living drive consumers to cut back on technology purchases?
July 27th, 2022, Bhavika Bansal

Global: Will the rising cost of living drive consumers to cut back on technology purchases?

A sudden global economic slowdown and inflation at its highest level since 2008 have raised concerns about how consumers can deal with the rising cost of living; and the impact is likely to be felt across sectors.

A recent YouGov survey asked consumers across 18 markets in which areas they would first make cutbacks if the increasing cost of living squeezed their household budget. While eating out (60%) and traveling for holidays (49%) top the list, technology purchases (39%) is also high on the list of areas where consumers are most likely to make cutbacks.

Interestingly, spends on mobile data plans (19%) remain one of the area's most resistant to cost-cutting in the face of inflation. Despite consumers being inclined to pull back on tech spends, telecom services are seen as more of essential cost of living.

Nearly half of Italian consumers (49%) indicate they are likely to cut back on making technology purchases as a result of a reduced household budget – making Italy the country where reductions on tech spending are most likely to happen.

More than two in five consumers in Mexico (44%) say they will reduce their expenditure on technology purchases, similar to their North American counterparts in Canada (41%) but significantly more than those in the US (36%).

Data indicates that technology purchases are a more valued component of the household budget in most APAC markets. Less than half of consumers in the region would choose to slash this expense (Australia, 38%; India, 38%; Indonesia, 35%; Hong Kong, 35%; China, 31%) - and all these markets fall under the global average. Singapore (44%) stands out from this trend as it registers the highest proportion of consumers who would pick this area to cut back in the event of tightening household budgets.

Consumers in Great Britain (38%) and France (37%) are almost as likely to reduce their technology purchases as global consumers. Unlike in the case of most of their European neighbours (Spain, 43%; Poland, 42%; Sweden, 40%), reduction in technology purchases is not a popular choice amongst the Danes (29% - the least of all 18 markets).

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Methodology: The data is based on the interviews of adults aged 18 and over in 18 markets with sample sizes varying between 508 and 2,605 for each market. All interviews were conducted online in May 2022. Data from each market uses a nationally representative sample apart from Mexico and India, which use urban representative samples, and Indonesia and Hong Kong, which use online representative samples.