The invasion of Ukraine remains the #1 concern of people in India followed by economic worries and the cost-of-living crisis, according to Kantar’s Global Issues Barometer report.
Asked to spontaneously share their concerns, 37% of people mentioned the war, followed by 29% mentioning economic issues, as their top concerns currently. Climate and environmental issues have also emerged among the top three concerns. Covid-19 is no longer seen as a pressing issue like the rest of the world, except in China where lockdowns are just lifting.
Stating the report, Soumya Mohanty, Managing Director & Chief Client Officer, Insights Division, Kantar, said, “The invasion of Ukraine has been one of the top concerns of Indians. But it is not as serious as one might think as a global consumer; as Ukraine-Russia war is only a concern in India because it affects fuel prices, which affects the cost of living. The primary concerns are inflation and climate change, which is quite surprising for us because we do not expect a country like India to be concerned about climate change. Many brands are raising their prices as a result of this.”
“As per the report, we feel the price increase on gas, F&B the most in comparison to the rest of the world, price increase on white goods- durables, mobile phones has pinched us more. We have started making cutbacks on general expenditures and stopped doing things to manage expenses. Compared to the world, we are rationalising savings and working harder,” Mohanty said.
According to Mohanty, in such a situation, creating smaller packs and sachets is a way to give customers the option of purchasing less. However, the current trend indicates that the stronger brands with pricing power will most likely be able to be resilient in this period. In addition, the data shows that consumers do not intend to cut back on essentials such as food and beverages. If they cut back, they will not cut as much as the global consumer.
Mohanty continued, “They are more likely to dip into their savings and they will cut back more on their savings, they are more likely to work harder and make more money rather than cut back on consumption which is a sign of optimism. The brands have to stay strong for some time.”
Kantar’s Global Issues Barometer study is a detailed analysis of 800 people's attitudes in India contrasted to 11,000 people across 19 countries (representing 68% of global GDP) as they strive to adapt to the tempest of global events. The study asked open-ended questions to understand peoples’ real opinions and used Kantar’s TextAI technology to understand and analyse the responses.
As per reports, the inflationary trend kicked in the first quarter of the financial year 2022-23 and has cooled down a bit in the past 15-20 days owing to the dropping of crude and edible oil prices in India.
While speaking on the increased prices and their impact on the consumers, Mohanty explained, “There will be some impact on the volume in the short-term, but the value and profitability margins will hold. It's a tradeoff that people will have to make. Our data is saying that as far as essentials and small treats like small discretionary, beverages and chocolates are concerned, the consumers are not going to cut back too much, especially the urban consumers.”
“As a result, they will be able to cut back in the short-term, but if we can entice them out, especially when the holiday season is approaching it's quite unlikely as this is not as dire as it appears,” she added.
Consumers are becoming more conscious: what do brand owners need to think about in a new world of risk?
The data further reveals that for 74% of Indians, the increasing cost of living and other issues of concern are having an impact on their big life plans.
While 35% of the population report their household financial situation is deteriorating, 46% believe the general economic outlook of their country is negative right now. People are struggling to meet their living costs, with 32% of households experiencing difficulties meeting their monthly outgoings and 11% unable to meet their commitments. The problem looks set to continue, a further 71% of people believe inflation will continue to rise even further.
Consumers are becoming more conscious when it comes to big-ticket items or about plans such as retirement plans, as per Mohanty.
She added, “The brands which are in the business of tomorrow, like an insurance for example. Those are the brands that need to think through on how to make consumers still invest in securing their future. Whereas the food and drink brands should think about how to get the consumer to come out and spend money.”
Discussing in detail what brand owners need to think about in this new world of risk, Mohanty clarified, “First thing is definite agility because there is nothing fixed today, it's constantly changing. We went from worrying about the future to prioritising the future or prioritising the present over the future. Brands need to constantly understand that nothing is completely fixed, but what does it mean as far as Indian consumers are concerned. There are two things, one is we are an aspirational economy and we are not going to get too pessimistic, unlike the rest of the world. So as long as you can give a vision of a lifestyle or aspiration, you can entice the consumer to come out and spend.”
“The second thing is that sustainability is going to stay and it should be made a part of the brand purpose and should be communicated to the consumers.”
The challenge for brands today is to predict how consumer behaviour is going to unfold. In situations like these, the brands must have a plan A and a plan B option and they should be able to switch between the two as fast as possible.
Brands must propose their green offer
Climate inaction is causing unusually high levels of distress, with more than half of the population suffering from eco-anxiety. As per the report, two-thirds of the population believes businesses have a responsibility to address the climate crisis, and 84% of consumers want to buy environmentally sustainable products but want brands to do more to make them affordable.
There is a strong sense of shared responsibility between government, the general public and businesses to tackle climate issues. Consumers are more conscious of climate change, so the brands need to act responsibly on it, said Mohanty.
She further continued, “Consumers would prefer green brands or green products and solutions if they do not come at a premium. They're not going to pay more for it. But if you give them a green solution, they will prefer that. Even the brand needs to find out efficient ways of creating or reducing carbon footprint or creating sustainable solutions. The brands should be focusing on indigenous and local sourcing and more efficient technology. They should also lobby a bit with the government for a lot more rebates or taxation rebates on green products and standard FMCG products.”
Impact of inflation on the advertising Industry
Commenting on the impact of inflation on the advertising industry, Mohanty said, “Advertising industry is quite worried that brands will start pulling back and not spend money because that's what happens at the first sign of a slowdown, which is absolutely the wrong thing to do. Because even during the COVID period, we felt that brands have to be top of mind in a time like this as it's the only way you can make the consumer come back to you."
Hence, there are two ways of doing this. One is not to cut down on advertising, the second is digital remains a key medium, but the fact is people are going out now, so other mediums should also now get their fair share, and advertising has to be aggressive, noted Mohanty.