63% of Indian consumers cut back on non-essential spending: PwC report

Rising cost of living and personal finances is bothering citizens globally. Around 74 per cent of Indian respondents say they are concerned about their personal financial situation, as opposed to 50 per cent globally, according to the 2023 PwC Global Consumer Insights Pulse Survey.

The survey highlighted that 63 per cent of Indian consumers are cutting back non-essential spending. The survey captured the views of 9,180 consumers across 25 territories. In India, the survey included 500 Indian respondents across 12 metros, tier-1 and tier-2 cities of India (Mumbai, Delhi-NCR, Bengaluru, Visakhapatnam, Chennai, Kochi, Kolkata, Nagpur, Jalandhar, Hyderabad, Meerut and Rajkot).

Ravi Kapoor, Partner and Leader – Retail & Consumer, PwC India said, “PwC’s latest Global Consumer Insights Survey for India drives home the key message of ongoing financial stress in the lives of the consumers, where 75 percent of them are very concerned about their financial situation. This sentiment will have a potential restraining effect on spends in highly discretionary categories of electronics and luxury. Consumers will continue to demand world-class buying experiences in both physical and digital channels with work cut out for brands to reduce costs, enhance availability, and for ‘going local’. The silver lining here remains the unequivocal growths in adoption of digital channels and the desire to spend more on travel in the coming months.”

Supply chain disruption altering consumer behaviour

Nearly half of the Indian consumers (50 per cent) said rising prices remain biggest issue when shopping in-store, supply chain issues also dominate with bigger and busier queues at store locations (35 per cent), along with product availability (28 per cent), which is also impacting consumer behaviour.

Luxury/premium product industry to see decline in consumer spend

Due to the rise in cost of living, consumers are now planning to reduce their spending over the next six months. The biggest decrease is expected in luxury/premium products or designer products (38 per cent), virtual online activities (32 per cent), consumer electronics (32 per cent) and fashion products (clothing and footwear) (31 per cent), according to the report.

Travel (30 per cent) and groceries (21 per cent) reported the least planned reduction in spending.

Vocal for local

More than 88 per cent of consumers are willing to pay higher for a product that is produced locally, or made from recycled, sustainable, or eco-friendly materials (87 pe cent), or produced by a company with a reputation for ethical practices (87 per cent).

Data Privacy

Despite the rise in online shopping, data privacy still remains a concern for consumers. 65% of respondents are extremely or very concerned when interacting with social media companies, third-party/portal travel websites (54%), healthcare (59%), and consumer companies (58%). As a result, 41% of respondents do not share more personal data than they must, 37% opt-out from receiving communications from these companies, and 38% have overall reduced their interaction with these types of companies.