Indians flag rising costs as a concern: EY survey
1 min read . Updated: 19 Sep 2022, 06:22 PM IST
Premium- Growth will come at a cost, and companies need to review their value delivery mechanism instead of simply raising prices. The long-term aspirational needs of the consumer need to outweigh the short-term challenges that consumers face
NEW DELHI: Indian consumers are feeling the pinch of high inflation, which is likely to impact consumer loyalty and push them towards value brands, according to the EY Future Consumer Index.
As per the EY Index, 69% of Indian consumers consider rising costs a concern. They however, maintained a positive outlook on the Indian economy with 71% saying that the economy will recover within a year.
Rising costs are affecting consumers across all income levels, but more so the rich income classes (82%), followed by the middle class (72%) and low income households (67%).
“Growth will come at a cost, and companies need to review their value delivery mechanism instead of simply raising prices. The long-term aspirational needs of the consumer need to outweigh the short-term challenges that consumers face. This means continuous innovation for greater value delivery through improved functionality or lower costs," said Angshuman Bhattacharya, National Leader, Consumer Products and Retail, EY India.
The 10th edition of the EY Future Consumer Index surveyed 18,000 consumers across the US, Canada, Mexico, Brazil, Argentina, Chile, the UK, Germany, France, Italy, Spain, Denmark, Finland, Sweden, Norway, Australia, New Zealand, Japan, China, India, Indonesia, Thailand, Saudi Arabia, South Africa and concluded in June 2022.
Meanwhile, the research revealed a significantly pessimistic economic outlook from those surveyed in western markets.
Many more consumers from the US (54%), the UK (65%) Germany (84%), and France (85%) believe life will remain the same or worsen over the next three years, compared to Brazil (21%), India (24%), Saudi Arabia (37%) and China (38%).
In fact, 49% of Indian consumers say their situation is better off compared to what it was three to four months back, and 83% are positive that their financial situation would be better off within one-year; only 47% agreed to this globally.
The findings reveal that despite inflationary pressure, for Indian consumers, factors such as ‘health and goodness’ have emerged as equally important purchase drivers.
As inflation eats into household budgets, customer loyalty is also wavering. and making space for new brands often offered online. In fact, 42% of those surveyed are trying new brands to reduce costs, and 63% are willing to purchase a private label.
