June 21st, 2023, Bhawna Singh
Around the world, many consumers are feeling the effects of rising inflation and the rising cost of living, forcing them to cut back in areas of spending to try and balance their finances. Latest data from YouGov’s Global FMCG/CPG & Retail whitepaper 2023 – Changing purchasing habits in a cost-of-living crisis, shows that two in five urban Indian consumers (40%) have seen a decrease in their disposable income over the past 12 months while 23% have seen no change. With a quarter (25%) having experienced an increase, overall, the negative impact on disposable income outweighs the positive considerably.
When it comes to changes by age groups, we can see how the over 55’s, who have a higher propensity to be economically inactive, are the most impacted by a decline in disposable income. In comparison, those between 35and 44-years are the least impacted.
Furthermore, two-thirds of urban Indians (67%) are concerned about the impact of inflation on their spending in the next 12 months, and only 12% are not worried.
The report also explores the products and services that are showing increasing price sensitivity in the past six months. Clothing/ shoes tops the list of the most price-sensitive categories with almost half of urban Indians (47%) saying they have been mindful of this category in the past six months. Two in five are conscious of the price of groceries (42%) and mobile phones (41%).
Around a third have been concerned about the cost of medicine & healthcare products (35%), electronics (34%) and utilities (33%).
A fifth have been conscious about cosmetic products (26%) and car/vehicles (25%). Streaming subscriptions and video games are at the lowest end of the spectrum with 20% and 14% saying they have been sensitive to price changes in these categories.
With price sensitivity increasing across a number of products, brands, and retailers will have to actively engage in pricing activities and leverage their customer-based brand equity to stay afloat in the middle of this storm.
In order to manage their expenses better, consumers are resorting to a number of smart shopping tactics. Two in five urban Indian consumers said they have compared prices across retail channels (41%) to combat inflation. Many have waited for items to come on sale (38%), used discount coupons (35%), shopped at a budget or cheaper store (34%), or maintained a tight budget (33%).
Looking ahead, price comparison and using discount coupons are likely to be the top future tactics, with almost half of the consumers saying so (45% each). This is followed by waiting for the price of products to be slashed in sales or on sale days (42%), shopping at budget stores (39%) and keeping a tight shopping budget (37%).
To download the full global report, click here.
Methodology
The insights in this report are drawn from a recent global YouGov Custom Survey focusing on
the FMCG/CPG and Retail sectors. Covering 18 global markets of more than 19,000 respondents,
our survey was fielded between 17th January 2023 and 1st February 2023. Data for India is based on an urban online sample of 1004 respondents.
The report explores how consumer purchasing behavior adjusts to higher prices, the FMCG/
CPG categories consumers are cutting back - or spending more on - and investigates the tactics
consumers are implementing to save money.
The YouGov panel provides a naturally accurate and representative view of the population. Data
is adjusted with mild weighting using interlocking demographic characteristics—methodology
considered advanced in the market research space.