Over 50% consumers continue to have negative outlook on future income: Report

The extended lockdown in light of the COVID-19 pandemic has affected consumer sentiment across the world. In India, lockdown was first announced by Prime Minister Narendra Modi on March 24. The 21-day lockdown was first extended until May 3, and then till May 17 with ease in restrictions in some zones.

Areas across the country were categorised under red, green and orange zones, based on the COVID-19 case burden. In the green and orange zones, restrictions were eased, while the red zones continued to remain under a rather stringent lockdown.

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A report by the Boston Consultancy Group (BCG), which focused on the consumer sentiment in India during the period between April 30 and May 3, highlights that despite relaxations, concerns across health, economic situation and daily lifestyle continue at similar levels. It reveals that over 50 percent of consumers continue to have a negative outlook on future income.

People seem to remain pessimistic about future income, spending, and loan repayments. Such concerns are much higher among younger consumers, lower-income households and small business owners. The report noted that 85 percent consumers are worried about servicing loans once the three-month moratorium ends while over 50 percent consumers continue to have a negative outlook on future income.

Over 40 percent consumers think they will cut back on expenses in the coming six months.

If we look at categories of spending, essentials, at-home entertainment, health and insurance continue to show greater resiliency, according to the report. meanwhile, travel, OOH entertainment, apparel, large ticket purchases emerge as categories with significant reductions.

People are also likely to switch to cheaper brands or cheaper variants in the same brands for many of these categories of consumer goods and services.

Another thing that report looks at is the change in the nature of service consumption. It notes that a significant push towards the digital option has been seen in the current scenario.

For instance, many consumers are trying out digital in shopping, payments, media for the first time. There have been 20 percent additional new users reading news online, 40 percent new users shopping staples online, and 20 percent new users entering the digital wallets segment.

The report also points out that in terms of recovery, local retail and commute are likely to be the first ones to come back to normal.

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