The pandemic has seen a shift in consumer spending, benefiting some categories like packaged food, electronics, e-commerce, while hurting discretionary goods, entertainment, eating out, and travelling
NEW DELHI :
Indians used credit cards to spend more on food, groceries, shopping, and pay utility bills in 2020, as spends on travel and entertainment dipped sharply, as per data by credit card payment services company Cred that scanned spends of 1 million members across India’s top cities.
The data captures four periods, including pre-lockdown, lockdown, unlock, and the year-end festive season, across several categories such as shopping, food, utilities, travel, spends on fuel, and insurance.
Shopping, which includes apparel and electronics, and food, which includes groceries and ordering-in from eateries, saw the highest credit card spends through the year, accounting for 36% of total such expenditure in 2020, a behaviour driven by curbs.
Spends on shopping and food recovered to more than pre-covid levels at the end of 2020, Cred said in its analysis of credit card spends across Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune. Cred members spent 6% more on shopping and food using credit cards during the festive season compared with the pre-covid period, according to the data.
Cred, which incentivizes customers for paying credit card bills, has 5.5 million members.
The pandemic has seen a shift in consumer spending, benefiting some categories like packaged food, electronics, e-commerce, while hurting discretionary goods, entertainment, eating out, and travelling. Consumption-linked demand has thus been weak for several sectors.
“Credit card spends across other segments such as travel, banking and finance, as well as digital payments, have started increasing compared with the lockdown and post-lockdown phases. This shows that the sentiment of members towards spending is cautious still and shows a greater move towards plastic, which will improve in the year ahead. However, categories such as health and wellness, and infotainment have been last on the priority list of credit card spending for members," the report said.
In 2020, consumers also felt the strain on household budgets, a trend backed by Cred data, which shows people turned to credit cards to make banking and finance-related payments, including EMIs and topping-up insurance policies, as the pandemic cast uncertainty over incomes.