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Explained: How the Covid-19 pandemic has changed consumer behaviour

Falling incomes coupled with low optimism about the economy is making Indian consumers spend more on essentials, such as grocery and household supplies, and cutting back on categories like apparel, footwear, and travel.

Written by Surbhi Gupta , Edited by Explained Desk | New Delhi | Updated: July 19, 2020 11:37:57 am
Covid-19, covid 19 online sales, covid 19 online ordering, amazon prime, big basket, online grocery shopping, coronavirus, indian express, explained news, While e-commerce is on the rise, other digital and contactless services like curbside pickup, delivery and drive-through service, are seeing much higher adoption rates.

In the initial days of India’s first lockdown in March, consumers responded to the Covid-19 crisis with anxiety and fear, leading to panic buying of staples and hygiene products. As cases continue to increase and the economy shrinks, the consumer is adapting.

A recent report on the impact of Covid-19 on consumer sentiment and behaviour by Mckinsey & Co, published on July 8, after conducting weekly, bi-weekly and monthly surveys in 12 countries, said that 91 per cent Indians changed their shopping behaviour due to the crisis. Many urban consumers, increasingly working from home and reluctant to deal with crowded public places, are moving online for their shopping needs. If demonetisation compelled people to shift toward cashless payments, Covid-19 has made them adopt online shopping.

There has been more than 10 per cent growth in online shopping across categories during the pandemic globally, according to Mckinsey, and it is expected that consumers will continue with this practice even if brick-and-mortar stores reopen. Globally, one in five consumers who ordered their last groceries online did so for the first time. For consumers aged 56 years and above, this figure was one in three, said Accenture, in a similar research report published in April. These days, people are buying larger pack-size products or multiple units at once.

Falling incomes coupled with low optimism about the economy is making Indian consumers spend more on essentials, such as grocery and household supplies, and cutting back on categories like apparel, footwear, and travel. The Mckinsey & Co survey indicated that about 61 per cent of Indians are more mindful of where they spend their money, and 45 per cent are shifting to less expensive products.

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Apart from groceries and household supplies, Indians continue to spend on entertainment at home (from TV to streaming websites). The shift towards remote learning and aiding personal fitness and wellness through online resources is expected to accelerate. “Consumers are caring for themselves using virtual tools (such as fitness and meditation apps). Half of those we surveyed are spending more time on self-care and mental wellbeing,” said Accenture.

“Some of the consumer behaviour shifts include – rise in self-reliant ‘do it yourself’ values, increase in consumption of health and fitness supplements, community purchases through apps/websites, increased use of ‘super apps’ for shopping due to convenience, etc. It’s difficult to be sure of the degree to which consumer behaviour will permanently change,” Harsha Razdan, partner and head, consumer markets and internet business, KPMG in India, told The Indian Express.

Across the world, as people become confined to their immediate neighbourhoods, the trend of “buying local” is accelerating. People have become more mindful of what they are buying. “They are striving to limit food waste, are more conscious of costs and interested in buying more sustainable options,” said the Accenture report.

“Covid-19 has brought two major shifts in customer behavior: the reluctance to shop in a crowded store and increased propensity towards digital,” Neha Rawla, head, brand communications at Forest Essentials told The Indian Express. Other beauty brands like SoulTree and Kaya have seen approximately 30 per cent increase in their online sales. E-commerce company Myntra saw over 7 lakh first-time customers during their ‘End of Reason Sale’ last month. The company said that 56 per cent of the sales were in Tier-2 cities, including Guwahati, Bhubaneswar, Dehradun, Imphal, Aizawl and Panchkula.

While e-commerce is on the rise, other digital and contactless services like curbside pickup, delivery and drive-through service, are seeing much higher adoption rates. While some of these practices are being seen as a way to work around the crisis, the Accenture report said that “new habits formed now will endure beyond this crisis, permanently changing what we value, how and where we shop, and how we live and work”. E-commerce live-streaming is expected to gain popularity, with brands leveraging virtual reality to make the shopping experience more immersive.

Also read | A ‘never-before’ focus on health, food safety in India: Report

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