Urban India seeks less friction in shopping experiences

Global Consumer Insights Pulse Survey 2023: India perspective

Long exposure, drone shot of cars moving in different directions at night, with triangle graphics on top
Long exposure, drone shot of cars moving in different directions at night, with triangle graphics on top

Consumers are weighed down by concerns around cost of living and personal finances. Around 74% of Indian respondents say they are concerned about their personal finance situation, as opposed to 50% globally. Sixty-three per cent of Indian consumers are cutting back non-essential spending altogether, according to the 2023 PwC Global Consumer Insights Pulse Survey, which captured the views of 9,180 consumers across 25 territories. In India, the survey included 500 Indian respondents across 12 metros, tier-1 and tier-2 cities of India (Mumbai, Delhi NCR, Bengaluru, Visakhapatnam, Chennai, Kochi, Kolkata, Nagpur, Jalandhar, Hyderabad, Meerut and Rajkot). Out of these, 57% of the respondents were male and 43% were female.

The survey also found most Indian consumers expect to reduce their expenditure across all surveyed categories over the next six months, a significant decline in planned spend across all categories since the previous pulse survey, June 2022. Industries including luxury and premium products, travel, and fashion expect to see the greatest portion of consumer spend reductions over the next six months, whereas groceries is expected to decline the least.

88%

are willing to pay higher for a product that is produced/sourced locally.

Source: PwC's Global Consumer Insights Pulse Survey 2023: India perspective

To a large degree, covid continues to influence the experiences of consumers and the industries that cater to them. E-commerce grew massively during the pandemic in part because in many areas it was the only type of commerce available. Some of that boom is subsiding. But what seem like short-term declines may simply be mean regression in the context of long-term growth; 43% of consumers said they plan to increase online shopping in the next six months. These are among the central findings of the latest Global Consumer Insights Pulse Survey, conducted in December 2022 among 9,180 consumers across 25 territories.

Playback of this video is not currently available

2:18

ESG Risk Assessment Tool

The demand for integrating sustainability considerations is growing. But how can you define and identify sustainability risks if there is no single market standard to assess the elements required to perform the risk assessment?

The demand and supply shocks brought about by covid continue to ripple through the economy and factor into consumers’ decision-making, habits and attitudes. Yet, even as they take defensive actions, consumers remain resilient, demanding and eager to experiment. Consumers are seeking less friction—but that doesn’t necessarily mean opting only for e-commerce, or for physical experiences that are entirely mediated by technology. They’re continuing to experiment with the next generation of digital platforms, including the metaverse. And as more of everyday work and leisure life continues to go digital, mobile and virtual, concerns about data security and privacy remain a significant source of friction.

The survey makes it clear that companies must go beyond responding to consumers’ evolving attitudes, actions and aspirations. They must identify, isolate and mitigate the many frictions that stand between them and their customers, and between their customers and optimal experiences. Beyond meeting consumers where they are—physically and psychologically—companies must invest to ensure that they’ll be able to meet them where they will be in the future.

  • %

    of Indian consumers say they will cut back on non-essential spending

  • %

    respondents are very concerned about their personal financial situation

  • %

    consumers say they will opt for retailers offering free/discounted delivery

  • %

    Respondents say rising prices and supply chain disruption are leading shifts in consumer behaviour

Chapter two

Cost of living weighs on consumer confidence

Consumers globally are shifting their consumption habits in-store and online as the cost-of-living surges and supply chain disruptions impact product availability and delivery times. As a result, almost half (45%) say they are buying certain products when on offer/promotion, 44% are looking to retailers offering better value, 38% are using comparison sites to find cheaper alternatives, 36% are buying in bulk to save cost, and 33% are buying retailers ‘own brands’ to find savings.

Four distinct consumer segments emerge

Question 1: Considering the current economic climate and potential cost-of-living impact, how concerned are you about your personal financial situation?

Question 2: Considering the current economic climate, which of the following statements best describes your situation regarding non-essential spending?

Cost of living weighs on consumer confidence

Four distinct consumer segments emerge

Question 1: Considering the current economic climate and potential cost-of-living impact, how concerned are you about your personal financial situation?

Question 2: Considering the current economic climate, which of the following statements best describes your situation regarding non-essential spending?

Select a generation to explore varying levels of concern about the economy.

Answers All generations Generation Z Millennials Generation X Baby Boomers Greatest Generation
Not concerned and haven’t changed behaviour on non-essential spending 10% 8% 10% 8% 14% 25%
Concerned but haven’t changed behaviour on non-essential spending 20% 22% 21% 17% 16% 17%
Concerned to some extent and have taken action on non-essential spending 28% 31% 26% 28% 33% 34%
Most concerned and have taken action on non-essential spending 42% 40% 43% 47% 37% 25%
Chapter two

Supply chain disruption is shifting in-store/online consumer behaviour

Half of Indian consumers (50%) said rising prices remains the most frequently experienced issue when shopping in-store, supply chain issues also dominate with larger queues and busier store locations (35%), as well as product availability (28%) impacting consumer behaviour.

Issues experienced while shopping in-store in the last 3 months

Question: In the last 3 months, please indicate how often you have experienced any of the following while purchasing a product in a physical store.

Note: ‘Rising prices for household goods’ is a new option for the 2023 survey (replacing ‘Rising prices for groceries’).
Source: PwC’s Global Consumer Insights Pulse Survey 2023


Issues experienced while shopping online in the last 3 months

Question: In the last 3 months, please indicate how often you have experienced any of the following while purchasing a product online?

Base: India respondents (500)
Note: ‘Rising prices for household goods’ is a new option for the 2023 survey (replacing ‘Rising prices for groceries’).
Source: PwC’s Global Consumer Insights Pulse Survey 2023

Chapter two

Luxury/premium product industry to see decline in consumer spend

Consumers are planning to reduce their spending across all surveyed retail categories over the next six-months, with the greatest decrease forecast in luxury/premium products or designer products (38%), virtual online activities (32%), consumer electronics (32%) and fashion - such as clothing and footwear (31%). However, there remains an appetite for future spend, with 38% indicating they will look to treat oneself/others, whereas 54% view them as better quality. Travel (30%) and groceries (21%) had the least reported planned spend reduction.

Chapter two

Vocal for local! Sustainable products are in-demand from consumers

Despite a planned spend reduction and a challenging economic environment, consumers say they are still willing to pay more for sustainable product types. Overwhelmingly, more than 88% are willing to pay higher for a product that is produced/sourced locally, or made from recycled, sustainable, or eco-friendly materials (87%), or produced by a company with a reputation for ethical practices (87%). 

Willingness to pay a higher than average price for a product that is…

Question: Considering the current economic climate, to what extent would you be willing to pay a higher than average price for a product that is…?

Base: India respondents (498)
Source: PwC’s Global Consumer Insights Pulse Survey 2023

Back to the office

Question: Thinking about what your employer requires at this time, which of the following statements best reflects a typical working week for you?

Select a territory to see how working-from-home options differ according to location.

Hybrid0%

Non-hybrid0%

I am able to choose how and where to work.

I am required to work in a hybrid way.

Working status Global Australia Brazil Canada China Egypt France Germany Hong Kong Indonesia Japan South Korea Malaysia Mexico Philippines Saudi Arabia Singapore South Africa Spain Thailand UAE USA Vietnam Ireland India Qatar Western Europe Asia Pacific Africa and Middle East Americas SEAC
Non-Hybrid 63% 63% 61% 64% 56% 54% 68% 64% 68% 62% 67% 78% 67% 59% 61% 61% 59% 60% 66% 46% 66% 73% 52% 67% 60% 62% 66% 62% 61% 65% 57%
Hybrid: Required to work in a hybrid way 26% 25% 28% 21% 34% 32% 23% 24% 26% 30% 16% 15% 20% 31% 27% 32% 35% 25% 27% 32% 29% 16% 40% 22% 29% 32% 24% 27% 29% 24% 31%
Hybrid: Able to choose how and where to work 10% 11% 10% 12% 9% 13% 7% 10% 5% 8% 14% 6% 11% 10% 11% 7% 6% 15% 7% 21% 5% 10% 8% 11% 10% 6% 9% 10% 10% 11% 11%
Chapter two

Metaverse: Early-stage adoption strong, executives recognise the importance of risk management, cyber security, governance considerations

Adoption of the metaverse as a shopping channel is still in its early stages of adoption, however, the medium still remains under-utilised, with only one-quarter (23%) of Indian respondents having heard of the metaverse but have not used it in 2022. The largest portion of these users have primarily employed the metaverse for virtual reality (VR), i.e, playing games or watching a movie (20%), joining a virtual world, i.e, experience a retail environment or concert (13%), or purchasing a digital product, such as a Non-Fungible Token, or NFT (17%). Those most likely to engage in metaverse-related activities: India (48%), Vietnam (43%), and Hong Kong (42%), as well as millennials (36%).

All the while, as on-line shopping continues to grow in volume, consumers are increasingly weary of data privacy. 65% of Indian respondents say they are extremely or very concerned when interacting with social media companies, third-party/portal travel websites (54%), healthcare (59%), and consumer companies (58%). As a result, 41% of Indian respondents say they don’t share more personal data than they have to, 37% opt-out from receiving communications from these companies, and 38% have overall reduced their interaction with these types of companies.

Metaverse-related activities undertaken in the last 6 months

Consumers aren’t approaching where to shop as an either–or proposition but as a this-and-that set of options.

PwC’s February 2023 Global Consumer Insights Pulse Survey

These trends in consumer preferences point to a hybrid shopping strategy that producers and retailers are grappling with: consumers aren’t approaching where to shop, regardless of what’s on their list, as an either–or proposition but as a this-and-that set of options. This duality was apparent well before the pandemic. Despite persistent economic and social headwinds, consumers aren’t simply switching from online to in-store shopping. Rather, they’re choosing one or the other—or both—based on preferred attributes of each, such as in-store technology or improving delivery times and costs for online orders. These trends are likely to continue throughout 2023.

40%

of consumers who intend to increase in-store shopping and decrease online shopping said it’s because delivery costs are too high. 

Source: PwC’s February 2023 Global Consumer Insights Pulse Survey

Chapter two

The next platform: The metaverse

Digital environments are evolving, whether it’s the continuing rollout of 5G or the integration of shopping into social media apps. And so, a great deal of attention is being paid to what may be the next large-scale digital platform: the metaverse, which promises to erase many of the frictions between the digital world and the physical world. But the metaverse is still very much in its infancy, and is riven by its own set of frictions. As the PwC report Demystifying the metaverse concluded: ‘The metaverse is an evolution, not a revolution. And it’s one that business leaders should not ignore.’

The countries with the highest percentage of metaverse users have young populations and growing middle classes.

PwC’s February 2023 Global Consumer Insights Pulse Survey

Our survey finds that various components of the metaverse are already available and being explored by consumers. Just more than one-quarter said they have participated in metaverse-related activities in the last six months for entertainment, virtual experiences or purchasing products (26%). For example, 10% have used a VR headset to play games or watch a movie, or for work-related activities. Nearly as many said they’ve experienced a retail environment or a concert virtually or they've purchased an NFT, or non-fungible token (both 9%). 

Use of the metaverse varies widely by age and across countries. Not surprisingly, the younger the person, the more likely they are to engage with the metaverse. Demographically, young Millennials (36%) and Gen Z (31%) are the top metaverse users, while only 8% of Baby Boomers and 6% of the Greatest Generation cohort have used it. And the countries with the highest percentage of respondents who said they had used the metaverse in the past six months were India (48%) and Vietnam (43%)—countries with young populations and growing middle classes. 

Chapter two

Data privacy is increasingly important to consumers

Whether they’re using the metaverse or not, consumers already inhabit a thoroughly digital universe. The billions of daily transactions, interactions and downloads that occur digitally are both enabling and compelling a pervasive sharing, collection, analysis and dissemination of consumer data by companies, organisations and governments across the globe. Control over all of that data has become a source of friction for consumers. Asked about their level of concern about personal data privacy when interacting in routine activities and with various entities, nearly half said they are extremely or very concerned when engaging with social media (47%). Concern is also high regarding the media in general (41%), third-party travel websites (36%) and healthcare companies (34%).

There’s lesser but still substantial concern among respondents when engaging with consumer companies (32%) and retailers (30%). It’s possible that retail performs comparatively well here because the return for consumers on providing data is clearer and more transparent, in the form of vouchers, discounts and special offers.

Consumers are acting on their concerns. Half said they don’t share any more personal data than necessary (49%), and 32% opt out of receiving emails, texts and other communications. And this is another sort of friction. Companies will be more effective and efficient and provide better value to their customers if they have more data about them. But when it comes to both regulation and behaviour, there are efforts to reduce the flow and use of data. To regain trust, leaders need to persist in their efforts to establish innovative data-privacy systems and operations—especially as lawmakers and regulators consider legislative remedies.

Retailers gain greater trust on data

Question: To what extent, if at all, are you concerned about the privacy of your personal data when interacting with the following types of companies? (Respondents answering ‘extremely concerned’ or ‘very concerned.’)

Select a channel to see to what extent each generation and region have privacy concerns.

Generation
Territory
Category Social media Media Third-party/portal travel websites Healthcare Travel operator websites Consumer companies Retail companies
Global 47% 41% 36% 34% 32% 32% 30%
Generation Z 45% 42% 34% 32% 32% 31% 28%
Millennials 48% 43% 37% 36% 34% 33% 32%
Generation X 46% 39% 34% 33% 31% 30% 31%
Baby Boomers 50% 40% 33% 29% 29% 28% 28%
Greatest Generation 50% 46% 39% 31% 36% 27% 33%
Western Europe 47% 38% 33% 34% 31% 30% 29%
Asia-Pacific 44% 40% 34% 32% 30% 31% 29%
Africa and Middle East 51% 47% 39% 36% 34% 35% 34%
Americas 50% 44% 39% 36% 38% 32% 33%
Southeast Asia 46% 43% 36% 33% 31% 32% 32%
Chapter two

The future of frictionless retail depends on customer loyalty

As we look ahead, there are three essential sets of frictions. 

There’s a set of frictions that are beyond the control of companies—macro levels of inflation, a global recession or contraction, wars, and disruptions to trade caused by the pandemic. In response, consumer-facing companies must focus on resilience, conduct scenario planning, and ensure that their supply chains, operating models and staffing levels are fit for a range of potential short-term outcomes. 

There’s a set of frictions that companies themselves can introduce relating to experiences—by not having sufficient staffing in stores or by failing to meet or manage expectations surrounding the experience. To guard against this, companies should focus on operational excellence and continue to experiment and innovate with the use of technology in stores and the creation of satisfying phygital experiences.

And there’s a set of frictions that consumers themselves introduce into the system, including changes in behaviour due to economic or personal circumstances. In response, companies must monitor and stay on top of the latest trends, and plot investments and initiatives that will meet customers wherever they are and build loyalty.

The term frictionless retail may be an important buzzword and a worthy goal. But a deep understanding of what consumers think, the stresses that concern them, and the demands and expectations they have should lead to a more sophisticated and strategic understanding of the frictions that exist—and the steps necessary to mitigate or remove them.

Global Consumer Insights Pulse Survey 2023: India perspective

PwC’s latest Global Consumer Insights Survey for India drives home the key message of ongoing financial stress in the lives of Indian consumers with 3/4ths of the respondents being very concerned with their personal financial situations. This sentiment will have a potential restraining effect on spends in highly discretionary categories of electronics and luxury. Indian consumers continue to demand world class buying experiences in both physical and digital channels with work cut out for brands to reduce costs, enhance availability and ‘go local’. The silver lining being unequivocal growths in adoption of digital channels and desire to spend more on travel in coming months.

Ravi Kapoor, Partner and Leader, Retail & Consumer, PwC India
Chapter two

About the data

PwC surveyed 9,180 consumers from October 24 to November 16 of 2022 via a 15-minute online quantitative survey. Interviews were conducted with consumers in twenty-five participating territories, and the survey was translated into fourteen languages. This survey highlights movements between pulses (with the preceding pulse being conducted in March of 2022) and explores any key data points in detail. The full Indian perspective findings can be accessed at

Urban India seeks less friction in shopping experiences Explore the full report.

Download

Get in touch
Reach out to start a conversation.

 

Ravi Kapoor

Partner and Leader, Retail & Consumer, PwC India

Follow us