by One of the advantages of marketeers, compared with neoclassical economists, is that they do not assume things about consumers but observe them or ask them questions. So did Nielsen India, a large marketing company, less then a month after the infamous Indian demonetisation. The report is ungated and, for one thing, contains valuable information about the female experience. An excerpt PART B: DECODING CONSUMER SENTIMENT (Source: Nielsen India)To pick up the consumer sentiment at this point in time, where they would have startedadjusting to this new reality, we ran a consumer measurement of sentiment and reaction. We reached out to nearly 800 people* in an online survey carried out between 25th November and 1st December 2016. Findings were quite revealing (Cities covered: Mumbai, Delhi,
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One of the advantages of marketeers, compared with neoclassical economists, is that they do not assume things about consumers but observe them or ask them questions. So did Nielsen India, a large marketing company, less then a month after the infamous Indian demonetisation. The report is ungated and, for one thing, contains valuable information about the female experience. An excerpt
PART B: DECODING CONSUMER SENTIMENT (Source: Nielsen India)To pick up the consumer sentiment at this point in time, where they would have startedadjusting to this new reality, we ran a consumer measurement of sentiment and reaction. We reached out to nearly 800 people* in an online survey carried out between 25th November and 1st December 2016. Findings were quite revealing (Cities covered: Mumbai, Delhi, Kolkata, Bangalore, Chennai, Ludhiana, Ahmedabad, Vijayawada; Male – 52%, Female – 48%; Age 18 – 45 years; Occupation working professional, housewife, students)
Decline in overall spending: About half the consumers have cut down their household spends significantly.
One out of five housewives has reduced spending by 50% or more. :
They have reduced spends across categories (impulse as well as essentials), we expectedly see a relatively higher cutback for impulse categories (biscuits/salty snacks) compared to everyday essentials (atta/rice/pulses/sugar).
While housewives and students bore the brunt of demonetisation, working professionals saw minimal impact, possibly because they are already using alternate modes of payment for their purchases.
The channel of choice for grocery purchases: Every second consumer has chosen modern retail and online for household purchases like food essentials including atta, rice and oil. The shift is perceptible in categories of household (laundry, floor cleaner, utensil cleaner), personal careproducts (lotions, soaps, shampoos etc.) and daily staples (milk, curd, fruits and vegetables). In fact, two-thirds of housewives we reached out to, have shifted to either supermarkets or online stores post demonetisation as compared to half of the students. As indicated in our previous note, packaged grocery saw a 44% growth in modern retail sales compared to a year ago.
Have they switched quantity for quality? Working professionals and students are showing loyalty towards brands by opting for smaller packs without changing their brand choice. However, housewives are rationalising spends by exercising multiple options of either small packs or less expensive brands.
Who was affected the most? One in two housewives and two out of every three students claim a bigger disruption in their lives. Given that a housewife usually has a monthly allowance to manage her household expenditure she experienced the most disruption. Additionally, with cash being the dominant spending gateway for her, she had to queue up at banks/ATMs to either exchange, withdraw or deposit cash. Students tend to get an allowance as well, and with scarcity of cash they too faced the brunt. However, both segments are still positive that demonetization will curb the issues of illegal cash.
Impact on daily life: Fewer consumers in metros feel their lives are impacted by demonetisation; with 45% respondents saying they were affected versus 65% in mini metros. Metros tend to be lesser cash dependent with larger alternate modes of payment vs. small towns.
Scarce cash fuelled quick adoption of alternate methods: Alternate payment methods including debit or credit cards, mobile wallets and net banking rose by 15%, with students leading the change at over 29%. The adoption figure for housewives is over 17%. Mobile recharges and utility bill payments too have seen a surge in the use of digital modes of payment. This is also true of entertainment, fashion and shopping for household and personal products.