Titled ‘The Next Normal: The Rise of the Contactless Economy', the study by Dentsu India has a small sample of more than 500 people, but spread across Gen Z (aged 5-25 years) and millennials (aged 25-39 years) in five metros and urban cities. 60% of the sample comprises Gen Z population
NEW DELHI: India’s urban young turned to local brands and sustainable products and took a fancy to organic and ayurvedic solutions as the coronavirus pandemic reshaped consumer behaviour, a new survey found.
Gen Z and millennials now prefer a conscious and contactless shopping experience, a report from the data sciences division of advertising agency Dentsu India said. The report, titled The Next Normal: The Rise of the Contactless Economy, sampled over 500 people across GenZ (aged 5-25 years) and millennials (aged 25-39 years) in five metros and urban cities. Sixty percent of the sample were in the Gen Z category.
Seven out of 10 consumers were ready to buy a less-known brand with a preference for local brands to international ones in categories such as fast-moving consumer goods, personal and home care, health products and apparel.
“Millennials and Gen Z audiences lean towards local, socially and environmentally sustainable choices and are mindful of what brands stand for as well. There is also a heightened preference for products that use organic and ayurvedic ingredients as opposed to those that have high chemicals in the personal care category," said Abhinay Bhasin, vice-president (Asia Pacific) and head of Dentsu Marketing Cloud (DMC) Insights, Dentsu International.
Covid has led to a sharp focus on health, reflecting in higher spending on sanitization and immunity products. 84% of millennials and 75% of Gen Z surveyed said they constantly worry about their personal health.
Almost half (49%) said they now rely on Ayurveda for their immunity needs. Around 60% of respondents turned to immunity-boosters, with a drastic rise in the demand and preference for ayurvedic treatments. This split is more or less equal among millennials and Gen Z. Their preferred brands include Dabur Chyawanprash, Revital, Patanjali and Himalaya Vitamins.
Lockdowns and restrictions have fuelled the online economy, even in traditional categories like banking. The report highlighted that close to 60% of transactions of surveyed consumers were fulfilled via virtual wallets, 23% via credit and debit cards and the rest through cash. Digital payments platform Google Pay enjoys the lion’s share of online payments, followed by Paytm, the survey found.
Online shopping, already popular among digital natives, has grown further. The study said online spendings by Gen Z is up from 12% earlier to 30% now, while millennials have doubled it from 16% to 32% during the lockdown, with companies expanding their online footprint.
Groceries and snacks have seen a threefold rise in online deliveries. While food delivery is still largely online, there has been a recent shift and a continuation of food service consumption offline due to the rise of home cooks. Apparel and footwear and jewellery purchases are still largely offline. Online deliveries of make-up and personal care products saw a 40% rise, prompting people to discover new portals and brands online in this space.
“Online beauty is growing 40% year-on-year. This is being driven by young Indians discovering beauty online and wanting products made more specifically for them. Which is why their preference is coming in for brands they feel are more connected to them and understand them better—and this is where direct-to-consumer (D2C) brands have the edge over legacy brands," said Darpan Sanghvi, founder and CEO of beauty and personal care direct-to-consumer startup MyGlamm.
Online education is another category adopted by young consumers that has helped play a key role in skill enhancement and completion of curriculum while schools and educational institutions have remained shut.
This has also resulted in a commensurate rise in ancillary purchases such as electronic devices.
Around 59% of respondents claim to have received an online certification in the past few months. This trend is likely to continue post-lockdown.
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