A whopping 77% of Indian consumers expect positive changes in their financial situation, and in the next one year, as per the ninth edition of accounting firm Ernst & Young's Future Consumer Index. The report pointed out that for India, the sentiment for a better financial situation is higher than their global counterparts, which the report pegged at 48 per cent.
The survey of over 1000 Indian consumers was conducted by EY in February 2022 and the report raises growing concern over the rising cost of goods and services that is impacting consumers globally, especially their ability to purchase goods is affecting decisively their purchasing decisions.
In this, emerging markets are feeling the pinch strongly, with 62 per cent citing affordability affecting their choices (South Africa was pegged at 77 per cent, India at 64 per cent, Brazil at 63 per cent, China at 42 per cent), compared with 45 per cent of respondents from developed markets (US at 50 per cent, Canada 52 per cent, UK 42 per cent, France at 40 per cent). The report further showed that in India, cost hike impacted lower-income earners the most (at 72 per cent), followed by the high-income group at 60 per cent, and the middle-income group at 58 per cent.
“Experience seeking consumers are less loyal, and with increasing price sensitivity and an inflationary environment, companies would need to toil harder to retain them. This calls for FMCG companies to look at their revenue and margin waterfalls and squeeze outspends across the value chain to drive profitability," said Angshuman Bhattacharya, partner and national leader, Consumer Product and Retail sector, EY India.
According to the EY report, over 54 per cent of the respondents in India have made physical health and wellness a goal for the next 2-3 years, with 80 per cent of Indians saying that they will be more cautious about their physical health in the long term, closely followed by prioritising their mental health (at 78 per cent). The report argued that these figures substantiates the fact that Indian consumers are willing, therefore, to pay more for high quality food, especially organics, despite the inflationary pressure bearing down on them.
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