With India in the grip of a broad-spectrum economic slowdown, nearly one in every two consumers have either cut down on or completely stopped discretionary spending, indicates a survey from LocalCircles.
The social media tracker’s Mood of the Consumer Survey, with 22,000 respondents, shows that many have changed their discretionary spending habits during August and September.
According to the LocalCircles report, 46 per cent in total have reduced spending, with 32 per cent of respondents saying they are spending less and 14 per cent saying they are not spending at all. 41 per cent, meanwhile, said their spending has been same as before while only 11 per cent say they are spending more.
Asset allocation in terms of majority of savings is still predominantly in safe bank deposits, with 44 per cent of consumers saying fixed deposits and 35 per cent saying equities or mutual funds. 13 per cent, however, said they kept the majority of savings in savings accounts and 7 per cent said real estate. No one said gold and jewellery.
However, while consumer spending has taken a hit, the survey also indicates that the upcoming festive season, especially Diwali, will brighten prospects. Asked how much their households plan to spend in the next 60 days towards the festive season, 43 per cent said they would spend up to Rs 10,000 on just festive basics and 31 per cent said they plan to spend between Rs 10,000 and Rs 50,000. Another four per cent said they plan to spend over Rs 50,000 and the rest of the 17 per cent said they will not be spending anything.
“These numbers seem to be the silver lining suggesting that many consumers may be back in the market in the month of October,” the survey observed.
Among those planning to spend more than Rs 50,000, 29 per cent said they would be spending it on home renovation, 12 per cent on automobiles, 6 per cent on jewellery, 18 per cent on white goods such as TVs, fridges and washing machines, 12 per cent on gadgets and a 3 per cent on property. People are also more likely to use e-commerce sites and retail stores both to buy their festive purchases.
However, the consumer outlook does not seem as promising on economic prospects going forward.
Asked about their expectations for their financial situation in the next six months, 31 per cent said it will get better, 31 per cent said it will stay the same, 31 per cent said it will worsen and 7 per cent were unsure.