With the second wave of COVID seeing higher infections, consumer sentiment has taken a hit, and consumer anxiety is at the highest level since the outbreak of the pandemic, a survey by Boston Consulting Group (BCG) has shown.
The survey, which covers all socio-economic groups across urban and rural India has revealed that 58 percent consumers think their income in the next six months will be lower than pre-COVID levels. About 83 percent of consumers see the pandemic posing a high level of threat to their jobs, and 57 percent believing that the worst of the virus is still ahead of us.
The survey found that the decline in sentiment is steepest among small towns and among the less affluent. While 76 percent of those in large towns are worried about their jobs, the number for rural India stands at 82 percent. Around 61 percent of rural India believes the worst of the virus is still ahead of us compared to 51 percent in large towns.
Nearly 62 percent of those surveyed in rural towns and 65 percent of those from Tier two, three and four towns expect a decline in their income.
Consumers to cut down spending
This has also impacted the sentiment about spending with 51 percent consumers expecting expenditure to be lower over the next six months. This shows a decline in sentiment because in the last survey by BCG around July-August of 2020, only 40 percent expected their spending to be lower.
Of this, most consumers expect to cut back on travel, on spas, theme parks, on eating at restaurants, movies and vehicle purchases. Meanwhile, spending sentiment for essentials, health, in home entertainment has not been impacted.
“The spending sentiment has not been impacted similarly across categories. Essentials, health, in home entertainment continue to be winners. Some of the discretionary categories, however, have been negatively impacted,” Nimisha Jain, Managing Director and Partner, BCG India said.
The survey also showed that there has been an unabated growth in adoption and engagement of people buying from chat groups, and people adopting healthier food choices.
Vaccine willingness improves
Another change that the second wave has brought about is a decrease in vaccine hesitancy, especially in rural India. While only 41 percent from rural areas were willing to take the vaccine in March 2021, the number increased to 63 percent in May 2021. Similarly in small towns, 74 percent of those surveyed are willing to take the vaccine compared to only 39 percent in March 2021.
However, 11 percent of those from rural areas and 14 percent from small towns are still hesitant to take the vaccine while 8 percent from rural and 7 percent from small towns have said they are unwilling to take the vaccine due to vaccine concerns.
The survey also reveals a digital divide when it comes to taking the vaccine with 60 percent of those in rural towns havent been able to take the vaccine despite being willing to while 63percent don’t know how to register on the CoWin app. There is also the issue if vaccine centres being far away for about 42 percent of those surveyed.
BCG's COVID-19 consumer sentiment research is based on a global survey which is currently covered in both developed and emerging markets. It is fielded in waves, with the current survey being the sixth wave, to provide a longitudinal view of consumer sentiments about the coronavirus pandemic, and changes in consumer consumption behaviour.
(Edited by : Jerome Anthony)