NEW DELHI: Nearly 63 per cent of the consumers in urban India under the ‘newly constrained’ category have seen their financial situation worsen leading them to consciously watch what they spend, according to a new report by NielsenIQ.
This is higher than the 43 per cent global average of newly constrained set of consumers from the 16 surveyed countries.
Consumers who were already watchful of their spends make up 10 per cent of the surveyed Indians, while 25 per cent have seen limited impact on their income but are watching what they spend more than before.
Consumers who do not have to worry about their expenses make up only three per cent of the surveyed urban Indians, the report said.
“This cautionary spending environment means brands will need to be laser-focused on this group’s newly emerging need states. Assortment, pricing, innovation, and distribution of products will need to be recalibrated; and quickly,” said Scott McKenzie, Global Head of the NielsenIQ Intelligence Unit.
The report also highlighted that the consumption habits are expected to be different compared to what was experienced in 2020.
Consumers are also uncertain about their financial future with 35 per cent of respondents saying they feel less confident about income prospects in the first half of this year.
The report also suggests that consumers are increasingly driven by value with 46 per cent saying they are driven by the lowest price, irrespective of brand.
About 31 per cent of the surveyed are also willing to cut back on grocery shopping if the economic situation worsened and 90 per cent want a better variety of value offers.
“Even with positive news of vaccine deployment, urban consumers are likely to stay cautious and continue to control their spending. Brands and retailers need to understand how consumers’ situations have changed,” McKenzie added.