Indian consumers’ behaviour during COVID 19: An Exploratory Study

S Shyam Prasad¹, Pratikshya Praharaj²

¹Professor, International School of Management Excellence, Bengaluru.

²Scholar, International School of Management Excellence, Bengaluru.

*Corresponding Author E-mail: s_shyam_prasad@yahoo.com, pratikshyap.isme1921@gmail.com

ABSTRACT:

Time and again it is said that Indian consumers behave differently from the western or global customers. Since a pandamic like COVID 19 has force lockdowns restraining the customer all over the world the consumers have exhibited different behaviour other than the normal one. Consumers behaviour is shaped by their wants and hence the importance of understanding it. Many business face the challenge of understanding the consumers and their wants and hence the flounder at the market place. This is more apt in India for the foreign companies that try to market in India. Many big multinationals companies (MNCs) have struggled in India before they got the hold of the market. Further, India being a young country compared to other countries, it has become a attractive market. The success is evasive to those who fail to understand the Indian consumers. Somehow, the ethnocentric behaviour of MNCs have not augured well for them. Even though the consumer behaviour has been studied by researcher and scholars for long now, they mainly focused on the western customers. Only recently the scholars have had occasion to study Indian consumers. Hence, this study was undertaken with the intention of understanding the behaviour of Indian consumers during the pandemic.

KEYWORDS: Indian consumers, Consumer behaviour, Ethnocentric, Pandemic, COVID19.

1. INTRODUCTION:

Consumers are the reason for the existence of any business and understanding consumer behaviour is one of the basic requirements. The diverse behaviour of the consumers makes it necessary for a business to understand it as deeply as possible. Consumers, despite a need being same to all of them, their wants and their buying behaviour vary (Schiffman & Wisenbli, 2015). A major hurdle for businesses has been the want of knowledge of consumers’ consumption habits. This is more true in the case of multinationals marketing in a foreign land. Marketers have been making efforts to understand the factors that influence the consumers and their buying behaviour with the premise that it would help them to manage them better and their purchases.

Though the science of consumer behaviour has evolved as late as the 1960s, it has accumulated, and continuous to do so, a vast literature on the various factors that influence the consumers’ buying behaviour. Starting from consumers’ needs, wants, motivation, their personality, perception, attitudes and culture have all been looked into. Despite this, the market witnesses product failure in the range of 30–49% (Castellion, 2012). This study, in a limited way, explores the Indian consumer behaviour, particularly during the COVID-19 pandemic.

2. BACKGROUND OF THE STUDY:

India is a large country with a huge population which is the second largest in the world making nearly 20% of the world’s population (UN DoE and Social Affairs, 2019). Half of its population is below 25 years of age and 65% are below 35 years old. This makes India a young country with huge market potential. This attracts many global companies to the Indian market. Under such a situation, it is prudent for all the companies, and particularly their marketing people to be aware of Indian consumers’ buying behaviour. Time and again, several studies have unequivocally established that consumers’ buying behaviour is influenced by culture (Chow, Deng, & Ho, 2000) and India with its diverse socio-cultural aspects make understanding Indian consumers very challenging if not impossible. Any business intending to operate in India needs to consider this complex factor before venturing into the market (Ghoshal, 2016). The sheer size of the Indian consumers makes it tricky to understand them.

The emergence of newer technologies and ideas coupled with rising affluence has its own impact on Indian consumers’ attitudes. In addition, government legislation and push towards digitization, clean power, etc., too has inspired new habits. Present-day consumers’ behaviour is not what it used to be earlier. Hence, the picture projected by the older studies may not hold true and may require a relook. A survey conducted before Covid 19 set in by Boston Consulting Group’s Center for Customer Insight (CCI), has confirmed 10 emerging behavioural trends (Figure 1) of Indian consumers (Jain, Sanghi, & Jain, 2019).

To add to the complexity of the problem, the COVID pandemic has burst onto the scene creating unprecedented havoc. It has clearly affected all the activities in a man’s life and has forced changes in his behaviour (“man” and “his” may be treated as gender-neutral in this sentence). There is a clear necessity to under the changes in human beings’ behaviour and in particular the consumers.

3. OBJECTIVES OF THE STUDY:

To understand the effects of the pandemic, numerous studies have already been carried out worldwide. The effect of COVID on the economy, health, business, work habits and consumers’ sentiments to name a few have been studied. Most of the studies have been carried out by leading consultative organisations such as McKinsey, BCG, Deloitte, etc. and mostly they have centred around non-Indian consumers. There is hardly any India specific study has emerged. Some studies that have been published correspond to specific geographical areas. Hence, the first objective of this study is to understand the buying behaviour of Indian consumers during the pandemic and the second objective is to examine if it is any different from the rest of the world.

4. METHODOLOGY OF THE STUDY:

To achieve the aforesaid objectives, a mix of primary and secondary research was conducted. To accomplish the first objective, a survey was conducted and primary data was collected by using a questionnaire. The items of the questionnaire were selected from a similar questionnaire used to understand the consumer behaviour; from an original list of 15 items, researchers selected 12 items and dropped items that were definitely not available during the lockdown such as automobiles, schools, and electronic goods. On testing the questionnaire, some items, for example, snacks and packaged food items were causing confusion and so were either dropped or combined into a single item. Finally, a questionnaire containing nine items besides the demographic and contact details were prepared for the survey.

A list of 80 respondents was carefully prepared after ensuring that they are widespread and do not come from the same family or close relatives and also are at least five kilometres away from each other. This obviously requisites that the respondents are all either known to the researchers either directly or snowballing technique was used to reach as many people as possible. Even though this method suffers from selection bias and may have a large number of individuals with similar characteristics chosen, given the locked down condition with no possibility of contacting people randomly, this method was adopted. However, to overcome this weakness, not more than three references were accepted from a chosen initial respondent. Fortunately, the data does not reflect these biases. From the 31 respondents directly known to the researchers, 23 were asked to refer two to three individuals not related to them and living at least 5 kilometres away from them. A total of 348 respondents across India were contacted in total, including the initial 31 respondents and 305 responses were received. The high response was possible due to the respondents were contacted by people familiar to them.

To realize the second objective, secondary data was gathered from different sources on the internet. World Wide Web is flooded with news, information, surveys, opinions, and even research articles related to COVID-19. This secondary data was compared with our primary data to judge if any differences exist between Indian customers represented by the primary data and the rest of the world.

5. RESULTS:

5.1 Primary data:

The first question we asked was if the lockdown had any impact on their buying behaviour. 52% of the people surveyed said that it affected them very much whereas 37.7% agreed that it affected them somewhat (Figure 2). We may say that the lockdown impacted 90% of people’s buying habits.

Figure 2 Impact of lockdown on buying habits

To another question on the quantity of purchase during the lockdown, to understand if there was a change in that aspect, 69.7%, say 70% said that the quantity they purchased was more than usual, 16.3%, say 16% said no change in the quantity of purchase while 14% said that they purchased less than usual (Figure 3).

Figure 3 Change in the quantity of purchase

Figure 4 shows the categories of products affected during the lockdown. Beverages such as soft drinks, packaged drinking water, and fruit juices were affected the most. The second categories to be affected are meat products and dairy products such as cheese, milk, yogurt coming third. Packaged food such as pasta and cereal are the least affected.

On the payment front, most of the customers, 54.3% to be precise, preferred to make e-payments through digital payments, credit cards, etc.(Figure 5).

Figure 5 Preferred mode of payment

However, the place of purchase was largely confined to Kirana stores in 47% of the cases and 20.3% visited small departmental stores (Figure 6). Only 12.3% purchased online and 20.3% by other means.

Figure 6 Place of purchase

Figure 7 depicts the demographics of the people surveyed. The gender was equally divided between males (51.3%) and females 48%. 33.7% belonged to the 30 to 39 years age group, 33% belonged to the 20-29 age group and 22% belonged to 40-49 years. Only 10.3% were of 50-59 years and there were hardly anybody above this age group. 35.7% belonged to 3-5 lakhs per annum (LPA) while 25.6 were from 5-9 LPA and together can be said to belong to the middle-income group (61.3%). Nearly 15% each belonged to the upper-middle-income group (9-12 LPA) and slower-income group (below 3 LPA). Regarding education, 93.1% were either graduates, post-graduates or professionally qualified.

5.2 Secondary data:

According to the Organization for Economic Cooperation and Development, there has been a significant fall in the consumer confidence index – in fact, the lowest since 2015 (Whipple & Curtis, 2020). To revive consumer confidence, the business should understand the customers, and evolve to move along with them rather than trying to change them to old ways. While some retailers such as J. C. Penny, Neiman Marcus and J. Crew have shut their shops, others like Targe and Walmart seems to be doing well (Greeven, Yu, & Shan, 2020). McKinsey and company surveyed the consumer sentiments for a wide range of products. Figure 8 shows the consumer sentiment for those items that are relevant to this paper (Arora, Dahlström, Hazan, Khan, & Khanna, Reimagining marketing in the next normal, 2020). The secondary data can now be compared with the primary data to analyse.

Figure 7 Demographics

6. DISCUSSIONS:

We see that, from our first question, that lockdown impacted 90% of people’s buying habits. This is in line with the secondary data where the impact is so high that some retailers such as J. C. Penny, Neiman Marcus and J. Crew have shut their shops in the western world. This indicates that the impact has extracted similar behaviour among Indian customers.

To our next question, if there was any change in the quantity purchased during each purchases this in period, the data indicates 69.7% i.e. nearly 70% purchased quantity higher than usual. Research by McKinsey reveals that consumers are buying more products such as cleaning supplies, vitamins, and supplements. Further, research also finds that work-from-home has increased the consumption of foods such as coffee, etc. Once again, we observe that this behaviour is similar and both the Indian and Western consumers are similar in their behaviour.

Our next finds on the categories that were affected by the lockdown, however, throws up a different pattern. However, this was expected as the cultural factors play a strong role in certain products such as toilet paper, pet foods, alcohol, cruises and travel to mention a few (Arora, Dahlström, Hazan, Khan, & Khanna, Reimagining marketing in the next normal, 2020). Hence, there is a difference in the purchase behaviour of categories and they are affected differently.

Our survey reveals that Indian consumers prefer to pay cash for their purchases. This could be due to several reasons and it is out of the scope of this study to dwell deeper on this issue.

However, our finding on the place of purchase is similar to western consumers. Indian consumers were largely confined to Kirana stores (47%) and small departmental stores (20.3%) compared to western consumers where the convenience store segment rose only 3 per cent and large-format stores, such as grocery and warehouse, is up by 30 per cent.

7. CONCLUSION:

It is clear from the above discussions that, Indian consumers behaved much similar to western or global customers. Only on the cultural aspects, as expected, Indian consumers were different from the other customers. The COVID pandemic has clearly brought out that the Indian consumers largely are different from others on the cultural aspects.

8. MANAGERIAL IMPLICATION:

The study has some important implications for the managers. It is clear that consumer behaviour is influenced by several factors, Indian consumers are affected by their culture. The understanding of Indian culture for the marketers in India is very important.

9. LIMITATIONS AND SCOPE FOR FUTURE RESEARCH:

Like any other research, this study also has its limitations. One limitation is that this is only a cross-sectional study and a longitudinal study would have been better to understand the trend of the consumers. Secondly, for clarity, a pre-Covid and post-Covid will give a better understanding. Thirdly, the most important of all is, that this study is limited to a few selected household products only.

10. REFERENCE:

1. Arora, A., Dahlström, P., Hazan, E., Khan, H., and Khanna, R. (2020, July 19). Reimagining marketing in the next normal. Retrieved August 12, 2020, from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/reimagining-marketing-in-the-next-normal

2. Arora, A., Dahlström, P., Hazan, E., Khan, H., and Khanna, R. (2020, July 19). Reimagining marketing in the next normal. Retrieved October 1, 2020, from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/reimagining-marketing-in-the-next-normal

3. Castellion, G. (2012, May 15). Is the 80% product failure rate statistic actually true? Retrieved May 26, 2020, from http://www.quora.com/Product-Management/Is-the-80-product-failure-rate-statistic-actually-true

4. Chow, C., Deng, J., and Ho, J. (2000). The openness of knowledge sharing within organizations: a comparative study of the United States and the People’s Republic of China”. Journal of Management Accounting Research, 12, 65-85.

5. Ghoshal, T. (2016). Impact of Culture on Indian Consumers: An Exploratory Study. In C. Campbell, and J. Ma (Eds.), Looking Forward, Looking Back: Drawing on the Past to Shape the Future of Marketing. Developments in Marketing Science: Proceedings of the Academy.

6. Greeven, M. J., Yu, H., and Shan, J. (2020, June 29). Why Some Retailers Are Thriving Amid Disruption. MIT Sloan Management Review. Retrieved September 25, 2020, from https://sloanreview.mit.edu/article/why-some-retailers-are-thriving-amid-disruption/

7. Jain, N., Sanghi, K., and Jain, A. (2019, October 15). Ten Trends That Are Altering Consumer Behavior in India. Retrieved 06 07, 2020, from https://www.bcg.com/en-in/publications/2019/ten-trends-altering-consumer-behavior-india

8. Schiffman, L. G., and Wisenbli, o. L. (2015). Consumer Behavior (11 ed.). Pearson.

9. UN DoE and Social Affairs. (2019). World Population Prospects 2019. Retrieved May 25, 2020, from United Nations Department of Economic and Social Affairs: https://population.un.org/wpp/

10. Whipple, B., and Curtis, M. (2020, July 09). The Cost of Confidence. MITSloan Management Review. Retrieved September 25, 2020, from https://sloanreview.mit.edu/article/the-cost-of-confidence/?utm_source=newsletterandutm_medium=emailandutm_content=understand%20people%20more%20d%E2%80%A6

Received on 01.11.2020 Modified on 21.11.2020

Asian Journal of Management. 2021; 12(2):215-220.

DOI: 10.52711/2321-5763.2021.00033