The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors In India - Market Research

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Introduction

survey of Indian respondents established that 55% either 'strongly' or 'tended' to agree with the statement I believe my country of residence is in a recession. However their relative conviction in this belief is lower than the global average (69%). This reflects the greater optimism and growing financial and emotional satisfaction among Indians as prosperity has increased

Scope

Detailed analysis documenting Indian consumers' 'recessionary mindset' and how this influences perceptions about current and future prospects

Insights highlighting how the economic downturn has affected perceived quality of life, emotional wellbeing and financial security in India

In-depth analysis of Indian shoppers' changing price sensitivity, value consciousness and attitudes towards private label across 4 major FMCG sectors

Countries and categories covered: India; food and non-alcoholic beverages, alcoholic beverages, personal care and household care

Highlights

India's economy has demonstrated comparably higher resilience in the midst of a worldwide slump and it also seems Indian consumers recognize this. They are less likely to perceive that their lifestyle has changed in light of the economic downturn with just over a quarter (26%) perceiving that their lifestyle has been impacted by the recession

Despite modernization, traditional Indian values have persisted, posing dilemmas for marketers to develop creative campaigns that can work within an Indian cultural context

For 70% of Indian shoppers, overall quality of products sold has a high amount of influence over where people do their grocery shopping. This is symptomatic of the aspirational mindset among India's emerging consumer culture and the opportunities apparent for strong brands that are synonymous with quality

Reasons to Purchase

Gain a detailed understanding of changing consumer attitudes and behaviors amid the downturn in order to determine appropriate recessionary strategies

Obtain country and sector specific insight about pertinent recessionary themes such as private label and consumers' value consciousness

Assist consumer segmentation and targeting efforts by accessing data from two waves of primary research conducted in August 2008 and April 2009

Table of Contents :

Overview

Catalyst

Summary

Table of Contents

Table of figures

Table of tables

THE FUTURE DECODED

INTRODUCTION: Understanding how 'recessionary mindsets' influence Indians' attitudes and consumption is vital

The 'recessionary mindset' prevalent among global consumers has not been as significant among Indian citizens

Most Indians feel they have remained relatively resistant to the downturn

Key takeouts and implications: a 'recessionary mindset' has not yet been fully matched by a recessionary impact on Indians' lifestyles

TREND: Consumer confidence in India during 2009 is characterized by cautious optimism

Indians are generally content with their quality of life despite being more divided about the country's overall direction

Varying attitudes about the state of the nation reflect distinct social disparities in India

Key takeouts and implications: Indians' mood regarding the direction of the country has dampened slightly but they remain relatively upbeat about their improving quality of life

TREND: Indian consumers still have a great deal of confidence in their financial security and the future prospects of the economy

Less than half of Indian consumers are satisfied with their financial situation

Perceptions about the economy, job security, financial status and the housing market in India have all remained largely positive, and there is broad optimism for the six months ahead

Indian consumers are managing their finances more closely with some even struggling to pay the bills

The majority of Indian consumers are making greater efforts to save and are increasingly wary of their reliance on credit

Key takeouts and implications: Indians became slightly less secure in their financial situation in 2008-09, but expect improvements for the remainder of 2009

INSIGHT: The global economic crisis has had a negative impact on the emotional wellbeing of Indians with increased levels of stress and fatigue

Stress levels have been negatively impacted during the financial downturn

Work-life balance has been affected by the deepening downturn

The happiness levels of some Indian citizens have dropped due to the global economic crisis, but overall the mood keeps improving

Key takeouts and implications: aspiring Indian citizens report increased stress and fatigue but are confident that this will not coming towards the end of 2009

INSIGHT: Indian consumers are inherently price and value conscious, and this mentality has intensified further following the global economic downturn

Indian consumers are becoming more value conscious and are therefore looking to save money when buying groceries

Price consciousness heavily influences where Indians do their grocery shopping and how they shop, but quality still matters too

Key takeouts and implications: the general price consciousness of Indian consumers has intensified and is reflected by how they determine where to shop

INSIGHT: Brand loyalties are under increasing threat as Indian shoppers give up brands and increasingly embrace private label

Indian consumers, who have developed a penchant for foreign brands, are beginning to give up some of their favorite brands as they make more 'considered' choices

Private labels are potentially poised to attract value-conscious Indian shoppers in the downturn

Key takeouts and implications: the ingrained value consciousness of Indian consumers, combined with their current reflective consumption patterns, will create an optimal platform for private label growth

INSIGHT: Indians are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation, but a penchant for quality is also apparent

Indian consumers are opting for higher quality food and beverages but are still highly cost/value conscious

Many Indian shoppers consider private label food and non-alcoholic beverages to be identical to famous branded equivalents

Key takeouts and implications: a resurging desire to cook more often at home has occurred, while competition between private label and market leading brands in food and non-alcoholic beverages looks set to intensify, local private labelers can capitalize on favorable consumer perceptions

INSIGHT: The significant majority of Indian consumers' personal care regimes and related product choices have been 'recession resistant'

The majority of Indian citizens are committed to looking their best in day-to-day life

Price and value conscious personal care/beauty shoppers in India have not made notable changes to their personal care shopping and usage in order to save money

Indian consumers are generally aware of private label personal care products but strongly value brand name

Key takeouts and implications: Indian consumers' health and beauty regimes are proving to be largely recession resistant

INSIGHT: Indian consumers' alcohol consumption preferences reflect a reluctance to trade down

Indian drinkers are careful about how much they spend on alcohol, yet nearly one-third report they are drinking more

Value consciousness has had a similar affect on Indians' at-home alcoholic beverage choices compared to their out-of-home choices

Private label alcohol penetration in India is low which results in uncertainty about comparative quality against branded equivalents

Habit and brand have more influence on Indians' alcohol purchases than price

Key takeouts and implications: there has been little change for the majority of Indian drinkers suggesting that alcohol is largely 'recession resistant'

INSIGHT: Indian consumers' household care buying preferences are heavily shaped by price consciousness irrespective of an economic downturn

Price-led value is still the most influential factor for Indian consumers' household and laundry care purchases but preferences do reflect other important influences

The private label household care market in India is small, but Indians do not necessarily perceive a significant compromise in buying store branded products

Key takeouts and implications: Indians associate hygiene and cleanliness with wellbeing and this, combined with their inherent dislike of household chores, makes them somewhat quality conscious

ACTION POINTS

ACTION: Adopt a relentless approach to delivering and communicating better value than the competition

Focus on quality to create and maintain differentiation, and to prove to consumers that quality really matters

Invest in brand management because strong brands are even more pertinent indicators of quality in emerging markets

Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions, particularly to those with less discretionary income

ACTION: Look for opportunities to extend pre-existing products or launch new premium products into India

Do not assume that emerging market consumers are a large homogenous group: be highly attentive to regional nuances but also careful not to lose the cache of brand origin

Release products in smaller sizes with correspondingly smaller price tags to target the lower incomes apparent in the emerging markets such as India

Private label development should reflect the reality that adoption of such products will be incremental

Start planning for the longer-term by continually tracking Indian consumers as economic recovery starts to become a reality

APPENDIX

Methodology

Further reading and references

Ask the analyst

consulting

Disclaimer

List of Tables

Table 1: Consumer survey: level of satisfaction with the general direction of how things are going and quality of life, in India (compared with the global average), 2009

Table 2: Consumer survey: satisfaction with current financial situation, and importance attached to wealth/income and having finances in good order, in India (compared with the global average), 2009

Table 3: Consumer survey: perceptions of whether broader economic conditions, household's financial situation, job security/confidence and housing market confidence had improved or worsened in the six month previous and how each might change in the proceeding six months, in India, 2009

Table 4: Consumer survey: propensity to feel tense and the extent to which perceived levels of stress have changed in the last six months and are expected to change in the next six months, in India, 2008-09

Table 5: Consumer survey: propensity to feel very tired and the extent to which perceived work-life balance has changed in the last six months and is expected to change in the next six months, in India, 2008-09

Table 6: Consumer survey: happiness levels and the extent to which perceived happiness has changed in the last six months and is expected to change in the next six months, in India, 2008-09

Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among Indian shoppers, 2009

Table 8: Consumer survey: changing efforts being made to use coupons, change grocery store choice to save money, embrace more disciplined shopping, and gather and utilize store price information, among Indian shoppers, April 2008 to April 2009

Table 9: Consumer survey: the relative cost/value and quality consciousness of Indian and global consumers overall when purchasing food and beverage products in 2008

Table 10: Consumer survey: the extent to which Indian consumers are making an effort to save money by adopting various food and drinks consumption and preparation approaches, 2008-09

Table 11: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands in food, soft drinks and hot drinks, in India, 2009

Table 12: Total private label food penetration and spend ($ millions) in India, 2002-2012

Table 13: Total private label non-alcoholic beverages penetration and spend ($ millions) in India, 2002-2012

Table 14: Consumer survey: the importance attached to looking one's best in day-to-day life, the pressure to look good and satisfaction with physical attractiveness/appearance, among Indian consumers, 2008 and 2009

Table 15: Premium fragrance, make-up, haircare, skincare and personal hygiene markets ($ millions), in India, 2002, 2007, 2012

Table 16: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in India, 2008-09

Table 17: Consumer survey: attempts made by Indian consumers to change their personal care/beauty habits in order to save money, by product category, 2008-09

Table 18: Total private label personal care penetration and spend ($ millions) in India, 2002-2012

Table 19: Consumer survey: perception about private labels versus well known or market leading famous brands for grooming/beauty products in India, 2009

Table 20: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in India have cut down on the overall amount of alcohol bought/consumed in 2008-09

Table 21: Total private label alcoholic beverage penetration and spend ($ millions) in India, 2002-2012

Table 22: Consumer survey: the degree to which household and laundry care consumers in India made product choices with value/cost and quality consideration in mind, 2008

Table 23: Consumer survey: Indian attitudes towards doing housework, 2008

Table 24: Total private label household care penetration and spend ($m) in India, 2002-2012

Table 25: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands for household cleaning/laundry products, and how often such products are purchased to save money, in India, 2009

List of Figures

Figure 1: Recession and Recovery portal will allow industry players to continually identify emerging opportunities and track what is happening in the Indian economy as it develops

Figure 2: In late April 2009, over half of Indian consumers agreed that the country is in recession

Figure 3: Over one-quarter of Indian consumers have felt the impact of recession

Figure 4: Indian consumers are divided about the direction their country is taking but this has not significantly impacted their perceptions on quality of life

Figure 5: Indians' views about the country's general direction have been similar over the last few years

Figure 6: Economic/financial concerns top the list of personal concerns held by Indian and Chinese citizens despite the growing confidence in their rising prosperity

Figure 7: Over the course of 2008 and 2009, Indians have expressed considerably higher positivity about the economic situation in their country compared to US citizens

Figure 8: Indians welcome a free market economy having seen prosperity rise since the country's economic liberalization in the early 1990s

Figure 9: Indian and Chinese citizens are extremely optimistic about the future prospects of citizens in the respective countries

Figure 10: Less than one-quarter of Indians are currently dissatisfied with their financial situation

Figure 11: Indians' negativity about the economy at large is greater than that shown towards their personal situation

Figure 12: Consistent with much future focused research in the last decade or so, Indians generally anticipate significant improvements looking forward towards the latter stages of 2009

Figure 13: The future focused economic confidence of Indians looking forward to 2010 is very strong

Figure 14: Three-quarters of Indian consumers are managing their finances more closely while nearly a third of individuals report difficulties in paying all the bills

Figure 15: Indians' stated reluctance to use credit more than doubled between August 2008 and April 2009

Figure 16: Work-related stress in India reflects a life philosophy for many as they aspire for prosperity

Figure 17: Indian society has become more materialistic amid growing prosperity in the country

Figure 18: The economic downturn has also been accompanied by additional stress levels among Indians, but less so than elsewhere

Figure 19: Indians are prone to fatigue while one-in-five experienced a worsening work-life balance in the period October 2008 to April 2009

Figure 20: Fewer Indian citizens than elsewhere became less happy during October 2008 to April 2009

Figure 21: Nearly two-thirds of Indian consumers are more value conscious following the downturn

Figure 22: Quality of products sold has more influence than lower prices or habit over where Indians do their grocery shopping

Figure 23: Price and value consciousness is influencing where Indian consumers do their grocery shopping and how they shop

Figure 24: One-in-four Indian consumers are sacrificing their favorite brands to save money

Figure 25: Being seen with the right brand is an important part of the developing consumer cultures characterizing the emerging Asia markets

Figure 26: Nearly one in five Indian shoppers are routinely buying private label/store branded products in an effort to save money but this is well below the global average

Figure 27: The private label market is impacted by a broad range of drivers and inhibitors

Figure 28: Indian consumers were increasingly value conscious in their food and beverage choices in 2008, yet they were unwilling to compromise on quality

Figure 29: Indians attach high importance to a considerable range of food and beverage features/attributes when making product selections

Figure 30: Indian consumers are adopting various responses to cut back on food and beverage spend

Figure 31: Indian consumers made more effort to cook an evening meal at home from scratch between August 2008 and April 2009

Figure 32: There has been a marked decrease in the proportion of Indian consumers eating a takeaway meal at home in 2009 compared to 2008

Figure 33: Indian consumers are divided in their perceptions of famous branded food products, soft drinks and hot drinks compared to private label equivalents

Figure 34: The majority of Indians are appearance conscious and this makes them less willing to trade down when making personal care choices

Figure 35: In a mentality that conforms to the ideology of 'self branding' and the modernization of the country more generally, Indians believe that physical attractiveness will ultimately be advantageous to securing more opportunities in life

Figure 36: Two-thirds of Indian personal care/beauty shoppers became more price and value conscious in 2008 but they showed little desire to sacrifice on quality

Figure 37: Personal care/beauty shoppers in India are more inclined to purchase products based on routine and brand image

Figure 38: A smaller proportion of Indian consumers consider private label beauty products to be good alternatives to well known or market leading brands than those w

by: Aarkstore Enterprise

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