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In the last few years, businesses and consumers have grown to adapt to uncertainty. They have become more cautious and aware and will continue to change to face modern challenges.
During the pandemic, as in any crisis, we saw consumer spending shift towards essentials and value-for-money goods and services. The pandemic resulted in consumers feeling burnt out which led to changing consumer trends and a boost in tourism. The number of foreign tourist arrivals in India increased almost four times from January through July 2022 compared to 2021.
While the world continues to recover slowly from the exceptional circumstances of 2022-23, India’s growth is expected to be above average. According to IMF projections, growth in India’s economy is expected to be around 6.1%, lower than the 6.8% growth we saw in 2022.
Compared to this, the IMF projects that global growth will decrease further to 2.9%. Goldman Sachs has predicted India’s growth to be at 6% for 2023 with marginal relief from inflation.
Here are trends that are set to dictate consumer spending in 2023 and tips to help you make your experience wiser.
Comfort, Convenience and Quality Will Rule
Expenditures made outside the home have been slowly decreasing for many people in India. This has resulted in consumers prioritising essentials and necessary services. However, this also means that these consumers will spend more inside the household due to having more disposable income. Innovation with convenience as a focus will see an uptake as consumers spend more time and money to acquire products which provide an end-to-end or a plug-and-play solution to their daily problems.
People are increasingly comfortable talking to bots for services and requests and are demanding more from brands when it comes to customer experience. Forrester predicts that consumers will not only demand better service but will also be willing to pay an increased premium for it.
Retail Will Expand Both Online and Offline
Consumer retail is yet to bounce back like some other industries. However, retail sales have resulted in pre-pandemic revenues, especially around festival seasons. Companies are taking advantage of social media and technology to provide more services and enable quicker deliveries.
A large number of surveys have focused on consumer patterns in the e-commerce industry as well. Shopify recently conducted a survey noting that around 32% of customers are more likely to participate in-store experiences, which is less than a third. About 45% were also reported to browse online stores yet make purchases offline and in person.
This is indicative of the fact that customers are weighing a variety of options before making purchases. While e-commerce & online stores remain popular, many customers still prefer to make their purchases offline.
This year, companies are expected to expand their sales points across both digital and physical. Customers will shop this year by utilizing both online and offline resources that are available to them.
Consumers are becoming increasingly aware of the impact of their purchases on the environment, and they are looking for products that are environmentally friendly and sustainable.
Buvanesh
Health and Wellness are Becoming Increasingly Important
While the traditional health industry is still recovering from market closures and stress, Union Finance Minister, Nirmala Sitharaman has announced an increase in funding to the Department of Health and Family Welfare by 3.83% over last year.
Increasing medical tourism, higher availability of medicines and vaccines manufactured in India, and a service sector dominated by private healthcare businesses like hospitals, are expected to see a rise as well.
Statista reported that digital healthcare revenue in India is expected to increase to $600 million in 2023. Virtual consultations have become popular thanks to the pandemic and this is just one of the many exciting changes coming to consumer-oriented health care. With infinite information at their fingertips, consumers are opting for more products and services and blending the line between healthcare and other industries.
In response to changing market expectations, tech companies now package health metrics, step counters and heart rate monitors in their smartwatches. Restaurants offer healthy alternatives to popular food choices, and start-ups are reinventing bulky, expensive medical equipment.
Consumers will adopt healthcare & wellness as a regular part of their lives in 2023.
Attention is Becoming More Valuable
In a recent report by Euromonitor, it was revealed that over half the people surveyed had deleted apps from their phones; however, they weren’t planning to decrease their screen time. Instead, they engage more with useful apps and businesses they feel deserve more of their time.
As competition grows, consumers will be very selective about the apps they’d like to use more often and uninstall and forget about apps that don’t.
This is important because customers are realizing the value of their time and attention and therefore, businesses will have to work harder to get them to listen.
Local and Sustainable is the Way Forward
Every year, consumers’ awareness & interest in the world around them continues to grow including their concerns about climate change and global warming. Younger customers (especially urban), who dominate the Indian market, think a lot more about the brands they choose and their actions to preserve a healthy future. They not only look at a brand and its offerings, but they also heavily favour ethical, sustainable and local products. Companies are trying harder to make their products more environmentally friendly.
At the same time, the Indian market is also becoming increasingly opposed to foreign-made goods. The “Make In India” campaign has seen a lot of traction over the past few years. The Indian government has also urged businesses to be “Vocal for Local”, and many brands have participated. The PLI initiative by the Indian government is also doing its part in boosting domestic manufacturing.
Consumers are expected to continue this trend and increasingly favour brands with a balanced focus on sustainability and being of Indian origin.
Bottom Line
2023 will see a more opinionated, aware and focused consumer. In order to cater to them, brands have to become even more customer-centric. They will have to go to greater lengths to understand their consumers and build products, marketing and customer service accordingly.
