The COVID-19 lockdown has spurred many Indians to rethink their current lifestyles and needs, with many now observant of their consumer behaviour and specifically their spending habits.
According to a new analysis by ETMoney, overall spend by Indians between March and June was reduced by nearly 40% from the level of last year, with more consumers adopting the digital mode of payments and UPI being the most preferred amongst them.
In March, when the lockdown was announced, UPI transactions surged to 565% of what was done in March 2019. And from there, this growth slowed as lockdown measures were relaxed, but the numbers are still far higher compared to the same months of 2019.
The report found a significant dip in household spend in the month of April, due to supply chain disruption as only delivery of essential goods were allowed during the nationwide lockdown. People have also cut back on their monthly household budgets given the income uncertainty.
Due to the shutdown of restaurants and a general fear among people regarding outside food, the spend in this category took one of the highest reductions with people spending less than 20% as compared to last year.
For entertainment expenses, the month of April saw spend fall by 70% compared to spend during April 2019. However, in the months of May and June, as people got more accustomed to the lockdown scene, this drop in spending eased to 60% decline due to the adoption of OTT platforms and online games.
Spending on shopping was the worst hit in the month of April, dropping down to 13% of what shoppers used to spend in April 2019. But as lockdown rules were relaxed and online shopping businesses resumed, consumer spending has begun to recover. However, shopping was heavily dominated by convenience and value considerations.
In the month of June, shopping spend recovered to 63%, a little less than what it used to be in the month of March, before the lockdown started. Such a speedy recovery in shopping spend is also due to heavy discounts by both online and offline retailers.
Sourced from ETMoney