Indians More Concerned About Rising Fuel Costs Than Food & Electricity Costs, Reveals EY Survey

Rising costs are pinching Indians across all income levels, although 71% believe that the economy will recover within one year, according to the 10th edition of the EY Future Consumer Index.

The tenth edition of the EY Index reportedly surveyed 18,000 consumers across the US, Canada, Mexico, Brazil, Argentina, Chile, the UK, Germany, France, Italy, Spain, Denmark, Finland, Sweden, Norway, Australia, New Zealand, Japan, China, India, Indonesia, Thailand, Saudi Arabia, South Africa and concluded in June 2022.

The price pinch is more for the rich income group (82%), followed by the middle class (72%) and low income (67%), the survey revealed.

As per the survey findings, in India, consumers are most concerned about the rising fuel costs (76%), followed by increasing costs of utilities such as electricity (71%) and essentials like food (67%). 55% respondents were concerned about their ability to purchase a home in an inflationary environment while 53% were worried about saving enough to spend on non-essentials.

Also, 76% of India¡¯s respondents felt their life would get better in the next three years, and 49% of Indian consumers say their situation is better off compared to what it was 3-4 months back, and 83% are positive that their financial situation would be better off within one-year (globally 47%).

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The EY index also revealed a significantly pessimistic economic outlook from the Western markets when compared to emerging markets. Many more consumers from the US (54%), UK (65%) Germany (84%), and France (85%) believe life will remain the same or worse over the next three years, compared to Brazil (21%), India (24%), Saudi Arabia (37%) and China (38%).

EY survey also highlighted that the preference for online shopping has become a habit and will continue to stay. 62% continue to buy groceries online making it the most used online service. However, a similar majority (62%) of Indian consumers are apprehensive of sharing personal information on websites or apps, vis-a-vis their global counterparts at 36%, because of data security and ID theft. This is closely followed by other channels like email (61%), e-banking transactions (57%), and social media (56%).

Also, even under inflationary pressure, while ¡®price¡¯ is the top criterion for purchase in global markets, factors such as ¡®health and goodness¡¯ emerge as equally important decision drivers for Indian consumers.

EY India¡¯s Statement

Growth will come at a cost, and companies need to review their value delivery mechanism instead of simply raising prices. The long-term aspirational needs of the consumer need to outweigh the short-term challenges that consumers face. This means continuous innovation for greater value delivery through improved functionality or lower costs," said Angshuman Bhattacharya, National Leader ¨C Consumer Products and Retail, EY India.

Customer loyalty is wavering under such inflationary pressures, making space for new brands often offered online. 42% are trying new brands to reduce costs, and 63% are willing to purchase a store brand/private label.

¡°E-commerce is here to stay, in various forms such as B2C, D2C, and B2B. The journey has just begun, but the channel remains an expensive one to operate in. Cost pressures are likely to make brands review their e-commerce unit economics, and take a prudent path towards a choice of operating models which are profitability accretive¡±, said EY¡¯s Angshuman, as per TOI report.

The EY Index also showed that a small but growing group of consumers is interested in exploring emerging technology and digital channels. Nearly one in 10 consumers have used digital currencies, experienced the metaverse, or purchased a virtual product.

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