Impact of US Recession on Indian Consumer Demand

HBL in an informative article points out the impact of Recession on Indian Consumer Demand as shown in the image alongside. Some of the inte...

HBL in an informative article points out the impact of Recession on Indian Consumer Demand as shown in the image alongside.
Some of the interesting trends that can be seen in Indian Consumer demand are:
  • The FMCG market grew at record levels of 18 and 25 per cent in the last two quarters of 2008.
  • Listed retailers selling apparel, accessories and electronics saw sales growth down to 15 per cent in the December quarter, from 61 per cent two quarters earlier.
  • In entertainment too, multiplex crowds have diminished and leisure trips are reducing.
 This data paints an interesting picture of Indian Economy. On the one hand the Indian consumers do seem to be slowing down on big-ticket purchases of cars and motorcycles. But there are not too many signs yet that they are holding back from purchases of high-end consumer durables. Sales of higher-end shampoos and fruit juices are not yet affected. So In the end we can actually summarize the key trends about this data set and how to target the Indian Consumers

  1. The rural economy is yet to be hit by the slowdown, and demand from this side may prove resilient for a while.
  2. The essential nature of groceries and FMCGs means that these areas may not see a slowdown, and spends on wellness, nutrition and food may continue, though already suspected ‘downtrading’ — foregoing purchase of a premium brand in favour of a cheaper one — may increase.
  3.  Discretionary spends may be curtailed, especially in those categories relying on third-party financing and credit market conditions.
  4.  A recent MasterCard Worldwide survey indicates that the Indian consumers’ spending priorities over the next twelve months would be towards children’s education, property purchases or renovations and wellness, in that order.
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