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Covid impact: Indians may spend more on e-commerce, even for offline categories

The report Facebook India and Boston Consulting Group claims that 79% consumers are not going out of the house (except for work), 49% consumers intend to buy more vitamins, herbs and supplements in the coming months while 54% expect overall household income to reduce in the next 6 months. Photo: iStockPremium
The report Facebook India and Boston Consulting Group claims that 79% consumers are not going out of the house (except for work), 49% consumers intend to buy more vitamins, herbs and supplements in the coming months while 54% expect overall household income to reduce in the next 6 months. Photo: iStock

  • India has seen a 1.3-1.7 times increase in number of online shoppers for essentials
  • The surge in preference for online channel is sharper in India than in many other countries like China, Brazil, Indonesia, Thailand and the Philippines

NEW DELHI: Around half of Indian consumers will increase their spending on e-commerce going ahead, even for traditionally offline categories, said a report by Facebook India and Boston Consulting Group (BCG).

The report -- Turn the Tide -- focuses on how covid-19 has changed consumer behavior and outlines the opportunity for businesses to build for the new consumer journey in times of pandemic and beyond.

Amid the pandemic, India has seen a 1.3-1.7 times increase in number of online shoppers for essentials, the surge in preference for online channel is sharper in India than in many other countries like China, Brazil, Indonesia, Thailand and the Philippines.

While 43% consumers plan to reduce overall spends in the next six months, more than half of them will still buy a cheaper brand/variant.

Social distancing, focus on health and hygiene, and increasing income uncertainty are seen as the key consumer-shifts that have emerged as a result of the pandemic.

The report claimed that 79% consumers are not going out of the house (except for work), 49% consumers intend to buy more vitamins, herbs and supplements in the coming months while 54% expect overall household income to reduce in the next 6 months.

“We are experiencing unprecedented shifts in consumer attitudes and behaviors... 80%+ consumers will continue to practice social distancing and are bringing the outside inside, over 40% of consumers are dialing up on health and wellness spends, e-commerce adoption has already advanced by 2-3 years," said Nimisha Jain, managing director and partner, Boston Consulting Group.

The report especially calls-out the massive acceleration in digital led by social media, which has increasingly become a one stop for staying connected, entertained and well-informed with an increase in consumption across online news, games and entertainment.

According to Facebook, 3 billion consumers have been actively using Facebook, Instagram, WhatsApp or Messenger each month during the pandemic with voice and video calling more than doubled across Messenger and WhatsApp in hardest hit places by covid-19.

For businesses, covid-19 has led to the emergence of micro-market opportunities, an increase in value consciousness leading to more utility-led shopping, consumers embracing digital even in historically offline categories such as education, health, and fitness, a definite increase in spends on health, hygiene and wellness with 91% Indian households washing hands more often, and a rise in do-it-yourself (DIY) trends.

Businesses thus need to tailor strategies to today’s unique context. Players who show the agility to reinvent their value propositions, go-to-market plans and business models to address these demand shifts will be the ones that set themselves apart from the pack, added BCG’s Jain.

“In response to consumers embracing the digital medium, brands need to focus on solutions that are relevant for the new normal such as hyper-localization, creating virtual experiences, re-looking at the media-mix to build efficiency, or building messaging around new habits such as DIY and the increased focus on health and hygiene," said Sandeep Bhushan, director and head, Global Marketing Solutions, Facebook India.

Since the covid-19 outbreak, Facebook has seen more brands explore Facebook and Instagram ‘Live’ to connect with their followers and customers and use social media platforms for new product launches.

For example, Hyundai India partnered with Facebook for the launch of Hyundai Aura, and leveraged Branded Content Ads using Influencers. Similarly, Eno leveraged Facebook to reach rural audiences through micro-targeting. The brand tied up with Facebook to customize communication in vernacular, tying the brand objectives, rural consumer understanding and platform best practices.

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