Indian consumers rein in non-essential spending, survey shows
Some 63% Indian consumers are cutting back non-essential spending, with 75% of them ‘very concerned’ about their financial situation, according to the 2023 PwC Global Consumer Insights Pulse Survey.
And nearly half of the Indian consumers (50%) told researchers that rising prices remain the biggest issue when shopping in-store, along with product availability (28%), which is also impacting consumer behaviour.
The survey also found that the spiralling cost of living meant consumers are planning to reduce their spending over the next six months. The biggest decrease is expected in luxury/premium products or designer products (38%), virtual online activities (32%), consumer electronics (32%) and fashion products (31%).
Travel (30%) and groceries (21%) reported the least planned reduction in spending.
Ravi Kapoor, a Partner at PwC’s Retail & Consumer, India, said: “Our latest survey for India drives home the key message of ongoing financial stress in the lives of the consumers, where 75% of them are very concerned about their financial situation. This sentiment will have a potential restraining effect on spends in highly discretionary categories of electronics and luxury.
“Consumers will continue to demand world-class buying experiences in both physical and digital channels with work cut out for brands to reduce costs, enhance availability, and for ‘going local’. The silver lining here remains the unequivocal growths in adoption of digital channels and the desire to spend more on travel in the coming months.”
The survey found that more than 88% of consumers are prepared to pay higher for a product that is produced locally, or made from recycled, sustainable or eco-friendly materials (87%), or produced by a company with a reputation for ethical practices (87%).
Despite the rise in online shopping, data privacy remains a concern for consumers, with 65% of respondents are ‘extremely’ or ‘very concerned’ when interacting with social media companies, travel websites (54%), healthcare (59%), and consumer companies (58%). As a result, 41% of respondents do not share more personal data than they must. Additionally, 37% opt-out from receiving communications from these companies, and 38% have overall reduced their interaction with these types of companies.
Researchers spoke to 9,180 consumers across 25 territories. In India, the survey included 500 Indian respondents across 12 metros, tier-1 and tier-2 cities.
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In a separate survey, PwC found that only nine of 100 Indian firms obtain clear consent before collecting data from customers – ones that collect consent that can be considered free, specific and informed from the users who visit their websites and not collected in a bundled form, where a single consent is obtained for multiple purposes.
And just 17% of Indian organisations have listed the email IDs of customer care or other functions for queries with respect to data protection.
The report, titled ‘Readiness of India Inc. for the Digital Personal Data Protection Act, 2023: A PwC Analysis’, is based on an analysis of the websites of 100 companies. PwC India’s report also noted that 48% of organisations in India provide the option to withdraw consent. “However, the process of withdrawing consent is not as easy as providing it,” the report said.
On the subject of third-party transfers, 43% of organisations were found to be lacking in providing a well-defined purpose for which personal data was shared with third-party data processors.
The Digital Personal Data Protection Act (DPDP Act), which came into force in August 2023, recommends the appointment of a data protection officer (DPO) by companies. The DPO will oversee the data protection strategy and implementation to ensure compliance with regulatory requirements.
The PwC report says 74% of organisations have listed contact details of a person or a team that can be contacted for queries around data processing. Of these, 54% have ‘proactively’ provided the contact details of their DPO.
“These organisations are likely to have a privacy framework in place, and they may have a head start in their compliance journey with the DPDP Act,” the report said.
Sivarama Krishnan, partner and leader of Risk Consulting at PwC India and leader of APAC Cybersecurity and Privacy at PwC, said: “The impact of the DPDP Act 2023 will be all-pervasive and considerably far-reaching for us as individuals, for businesses, and for the overall economy. For organisations in India, it is not only an opportunity to streamline their data collection and processing processes but also to build customer confidence and overall stakeholder trust, apart from enhancing their global competitiveness.”
