Find yourself spending lesser than usual? Global trends suggest a change in lifestyle
Sudhir shifted to Pune back in the year 2015. He had freshly graduated from college and was placed in an IT company in the city. He rented an apartment near his home to make the commute easy and had soon begun his life in the new city.
Like most migrant working professionals in Pune, Sudhir was dependant on food delivery for meals and would spend most of his weekends outdoors with friends.
But as the lockdown was declared, his life changed majorly. Soon, he shifted back home for the first time in five years and began adjusting to a new normal.
He shifted to eating home food and spending more time at home like all of us. Weekend movie plans shifted to Netflix parties and night-outs turned into indoor get-togethers.
This is the story of most millennials, as we all strive to return to normalisation post lockdown. But there has also been a change in consumer attitude which shows that the new normal might not be as we know it.
According to a study conducted by ET Money, overall spending in March, April May and June in the year 2020 has taken a significant backseat from the year 2019. People's expenses have reduced to nearly 40 per cent than that of last year.
While most business sectors are facing troubles in kickstarting their business, the worst affected by the drop in spending are the dining services, entertainment services and online shopping sector.
While restaurants have opened up in most states and cities, people are still apprehensive of going to restaurants. The virus has also taken a toll on the online food ordering business as people are scared of contracting COVID-19.
According to the ET Money report, in the lockdown months, people reduced their spending on outside food to 20 per cent of what it was during the same four months in 2019. Even after relaxation in lockdown rules, people preferred to eat at home instead of going out. Suddenly, moms are happy as home-cooked food becomes the star again!
Film producers, post-March actively started shifting to OTT platforms since theatres were closed in most cities. During the lockdown, OTT subscriptions grew exponentially, and people now prefer entertainment from the comfort of their home.
In April, when the country was under a strict lockdown, people had cut down their spendings on entertainment by 70 per cent to what they used to spend during April 2019. However, in May and June, as people got more accustomed to the lockdown scenario, there was a jump in the spending on OTT platforms and online games. In fact, reports suggest a 10 per cent jump in entertainment spends from April to June.
The festival season is generally the time when people invest a lot in shopping. But post lockdown spending has reduced considerably. People have restricted their shopping expenses to a bare minimum with most spending done on household items.
According to ET Money, it dropped down to 13 per cent of what shoppers used to spend in April 2019. But as lockdown rules were relaxed and online shopping businesses resumed, shopping sprees were on the rise again.
The shopping sector recovered to 63 per cent in the month of June due to heavy discounts. However, people's expenditure on shopping has continued to be heavily dominated by convenience and value.
An overall change in behaviour
According to a consumer survey done globally by McKinsey and Company, people are looking at engaging in out-of-home activities, but several intended to leave home and shop for necessities while maintaining low engagement in shared services.
For the holiday season and festival season, compared to last year, consumers across the globe plan to reduce their spending. However, China stands out as the only exception, with more consumers reporting increased spending than decreased spending.