Laborers on a production line at the Aqualite footwear factory in Bahadurgarh in the northern Indian state of Haryana in May 2020, after the government eased a nationwide Covid-19 lockdown. Photo: AFP

The Covid-19 pandemic has taken a heavy toll on Indian households and economically impacted nearly three-fourths of the urban population, according to a survey by consulting firm Kantar.

Titled “The New Indian Consumer Report,” it states that 72% of urban dwellers have been economically impacted by the pandemic and over half of them (52%) say they are financially worse off than last year. Two out of three people surveyed feel cynical about the improvement of the current situation and those residing in towns located in the eastern and southern parts of the country are more worried than the rest.

Many companies have either laid off employees or reduced salaries due to reduced demand, and some businesses have even closed down. The Indian economy is currently in a “technical recession” after contracting for two consecutive quarters.

The survey covered 10,000 urban consumers in the 15-55 age group in 15 states and focused on consumer mindsets (attitude & fears), category consumption, entertainment, shopping, online behavior and social media consumption, health and fitness, and how they felt about returning to “normal life.”

Kantar Managing director Hemant Mehta said, “The overarching theme this year seems to be around safety and security of family, health, livelihood and finances. With 72% urban Indians having been economically impacted by Covid-19; there is a shift to a savings mindset as well. Most consumers have become cautious of what they spend on and actively look out for deals/discounts while making any purchases. However, they are willing to pay a premium for products that provide them convenience and makes their lives easier.”

The survey notes that returning to the “old normal” may not be easy and that home activities/entertainment may not resume for another year. With consumers spending more time at home, digital and over the top media platforms such as Netflix and Amazon Prime have recorded a higher engagement this year, with a spike in daytime and late-night viewership.

With India’s coronavirus caseload around 9.7 million (second only to the US globally) and the country’s patchy health infrastructure facing immense strain, there has been a heightened awareness of health. Consumers are now spending more on immunity-enhancing food and drinks, and hygiene products like sanitizers and soaps. Due to the prevailing economic uncertainty, product availability and competitive pricing have taken precedence over brand name.

Working from home and taking online classes have become more mainstream as most companies and educational institutes remain closed to prevent the spread of the virus. This has spurred the demand for electronic items such as laptops, tabs and mobile phones. There has been an increased interest in learning new skills and greater acceptance of do-it-yourself products.

The pandemic has provided a shot in the arm for e-commerce as consumers now prefer to shop online and shun visits to physical stores for safety reasons. During the October-November period, when prominent festivals such as Dusshera and Diwali were celebrated, online sales touched US$8.3 billion and registered a year-on-year jump of 65%, according to consulting firm RedSeer.