Panic buying and hoarding of goods that happened towards the end of March 2020, when the lockdown was announced in the country, eased April onwards, as the government kept extending the lockdown in phases. The only category where consumer spending increased during the lockdown was the digital subscription.
Gripped with the fear of scarcity of essential items, consumers rushed to stock up groceries and medicines and purchased insurance policies in March as lockdown started.
The spending on all these categories fell sharply in April, according to a report by Cred, a credit card payments app. The consumers, however, continued spending on the subscription of streaming platforms, newspapers and online classes.
Cred analyzed the spending pattern of over a million members across three metros—Delhi, Mumbai and Bengaluru. For the report, the company took February spending as the base for month-on-month comparison.
The overall credit card spends dropped by 10% in March and 51% April onwards. The lower spending on cards was on the expected lines as the regular avenues of spending were shut. Except for stores offering essential items, the government didn't allow other shops and outlets to open. For some time, even online stores had suspended deliveries.
The report further goes into analyzing the trends in each of the three metros. Delhi consumers, for example, increased spends on fuel in March soon after the lockdown was announced. There was a substantial increase in fuel spends, up by 50%, on credit cards in the first week of the lockdown. Mumbai saw a 100% spike in medical spends soon after the lockdown was announced. Bengaluru, on the other hand, witnessed an increase in online grocery shopping, which was up by 44%.
In all the cities, residents rushed to buy insurance policies in March, which eased in the following month. Mumbai saw the highest spend on insurance in March, which rose 23%, followed by Delhi (11%) and Bengaluru (9%). In April, however, the spending on insurance policies dropped by 20% in Mumbai, 21% in Delhi and 14% in Bengaluru.
The online subscriptions started rising across the three cities soon after the lockdown was announced. As consumers realized that the lockdown would continue for some time, spends on online subscriptions rose 18%, followed by Bengaluru (11%) and Mumbai (8%) in April.