India: Over 60% urban Indians finances hit

According to a study, fast moving consumer goods (FMCG) companies, more than 60% consumers in urban India have seen their financial condition deteriorate even with the positive news of vaccine development.

While the number of these consumers who are changing their spending habits is growing, it is higher than the global average of 46%. The study conducted across 16 countries by NielsenIQ revealed that more than a third of them in urban India feel less confident about income prospects in the first half of this year (2021). While India’s FMCG industry has seen an uptick in consumption towards the end of last year, the consumers that brands and retailers knew last year are not the same today.

Scott McKenzie, global head of the NielsenIQ Intelligence Unit said, this cautionary spending environment means brands will need to be laserfocused on this group’s newly emerging need states. Assortment, pricing, innovation and distribution of products will need to be recalibrated, and quickly. Brands and retailers need to understand how their consumers’ situations have changed so they can meet their new needs.

Large numbers of urban consumers in India are employing new coping mechanisms to manage household budgets: 46% are driven by the lowest price, irrespective of brand; 50% always seek private labels; 45% say they buy products based solely on promotions. But 61% of consumers say they are brand loyal, and will only change brands if the regular price increases.

When it comes to grocery spend in India, 31% indicated they would spend less on these if the economic situation worsened, whereas 26% said they would spend more. In addition, 90% of consumers want a variety of good quality value offers, 83% are willing to buy directly from manufacturers and 79% will pay more if product quality is higher.