The COVID-19 crisis has affected many as people grapple with job loss, salary cuts and medical emergencies. They see virtue in savings and would continue doing so even as they witness a fall in income levels. A latest consumer survey by consulting firm KPMG indicates 85 per cent respondents are likely to stick to their savings plan even with a 10 per cent fall in their income, indicating the 'saving sentiment'.
India turns savers
The anxiety levels are high as 70 per cent respondents across all age groups are concerned about their future finances as against 49 per cent globally.
"The unexpectedness, scale and severity of the global pandemic has led to increased anxiety about personal finances across all demographics. Especially for youths who were just making their foray into the job market, lack of prior work experience (and therefore savings) combined with the severely compromised economic outlook makes the situation particularly precarious," notes KPMG in a report titled 'Me, My Life, My Wallet 3.0'.
Talking about trends in tier-1 and tier-2 cities, the report says 74 per cent of tier 1 city responders and 63 per cent of tier-2 responders gave more priority to their future finances over current finances, indicating the saving sentiment across all city segments.
"If income were to be decreased by 10 per cent, both tier 1 and tier 2 respondents show similar trends when it comes to cutting spending towards electronics, saving or investment, personal health, household goods, clothing and food like items," the report says.
Demographically, 78 per cent of Generation X (Age 37 to 53) and 70 per cent of Millennials (Age 17-36) are more concerned about their future finances.
A further deep dive into the younger demographics revealed that about 50 per cent respondents have started investing more in saving instruments post pandemic.
Digital by default than design
Among other trends, the report highlights that the acceptance and expectation of digital channels in this age and time are gradually gaining traction across India. "By default, rather than by design, India's older demographic has had to adopt a digital-first lifestyle. Indians, across all ages, have quite easily become conversant with video calling, net banking, online grocery shopping and streaming platforms. This was not a purely urban phenomenon, as the increase in digital sophistication of the older cohort was observed in smaller towns across India as well."
The report says that 49 per cent of the surveyed respondents are comfortable in using digital payment options to shop, as against 22 per cent globally. Some of them also revealed that an absence of a trusted payment gateway would affect their buying decision to a great extent.
Vocal for local
The report gives credence to the shift towards localised products and services as the government emphasises on Atma-Nirbhar Bharat and Make in India.
"About 60 per cent of respondents displayed active participation towards replacing foreign brands with indigenous goods. 41 per cent of respondents across all age groups are willing to pay a premium for indigenous goods. Non-metro respondents (45 per cent) are more willing to pay a premium for indigenous goods as compared to metro respondents (40 per cent)," the report says.
The survey included 2,164 respondents across urban and semi-urban markets over two phases. Phase 1 was conducted between February and March 2020, while phase 2 in September 2020 during the COVID-19 outbreak. Additionally, KPMG conducted an online survey of 1,191 respondents during January and February 2021.
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