India’s consumer spending set for impressive growth

Consumer spending is expected to grow by 7.1 per cent year-on-year in 2023. The wider economic recovery expected in India is amongst the key drivers for the projected growth of consumer spending in the market. According to Fitch Solutions, this will also be driven by the growing domestic demand and improved resistance of consumers against diseases as the country continues its vaccination drive.

Although inflationary forces will rise through the year, a strong showing in real income growth of the consumers will give greater propensity for an increase in household spending. A Moj report suggested that over 77% of young India spends most of its time watching short videos, followed by 16% on news and entertainment channels and seven per cent on television and OTT. Around 60% of young India’s purchase decisions are influenced by short video and social media followed by online platforms and television. Offers and discounts are one of the top influencing factors for more than half of their decisions, followed by reliability of products, convenience and free shipping. Moreover, 77% of young India spends heavily on mobile phones and apparels. Over 65% use personal funds for such purchases, while 26% seek financial help from friends and family while seven per cent prefer loans. In their bid to tap this vibrant segment, most brands are using short video content to create engaging campaigns to woo buyers.

Incidentally, the three defining elements that drive satisfaction include those that promise innovative experiences; it matters that brands build communities and treat their staff right as the youngsters seek to be integral to the larger community whereby the brand shows that concern for employees. The third clincher is helping them learn through the brand experience and content. When it comes to personal factors we see interesting differences in what’s expected of brands. While the expectation that brands know their reputation and popularity, what makes India unique is that across the 10 markets, we are one of only two (the other one being China) that expect brands to help us learn new things through their experience and content. Indians continue to value the relationships they form with brands. They continue to want brands to engage in interactions that make them feel valued as customers. This now comes with an added layer-an expectation that this be a relationship that also manifests at the community level. To deliver the best customer experience, brands must be efficient and help customers save on time, which consumers ranked as their number one criterion for six pure players across the ten countries. They also value brands that make it easy for them to find what they’re looking for and answer their requests promptly. In nine of 10 markets, consumers rated brands higher on efficiency than pleasure, which implies that brands have room to improve emotional connections with their audience. Nurturing brand loyalty is the name of the game.