Over 50% affluent household ‘profoundly impacted’ by COVID-19  

A study focussing on the post-COVID perceptions of the affluent consumer segment on how they are likely to prioritise their household spending in the immediate future, has found that although over 50 % households are "profoundly impacted."

The impact of the COVID-19 pandemic and the collateral damage, current and anticipated, have had a significant impact on the affluent consumer households, an Access Media International study said.

"The affluent Indian consumer might be down, but not out. If anything the consequent lockdown following the outbreak of COVID-19 has led to a pent-up demand to some extent. The question being where is the affluent consumer likely to spend in the next two quarters. As far as the mid-market and the mass-market consumer households are concerned it is fairly straight forward: they will only spend for essentials, and economize wherever possible. It is the affluent consumer segment that can provide a certain amount of reprieve to the B2C marketplace.

"It is quite evident that the pandemic has severely affected a large cross-section of our society, the affluent class being no exception. Households are unequivocal in that this recent experience has had a significant impact. Having said that, as the virus adjusts to its new living conditions, and we grapple with this pesky alien, most have started reconciling to the new normal," the study said.

Close to 35 % households are unlikely to undertake any air travel in the next two quarters, it said. But there is some good news for weekend getaways, motels and resorts as almost 35 per cent are willing to travel upcountry for weekend/short vacations.

Quite similar is the pent-up demand to eat out, as opposed to ordering in. However the fear factor is still at play, the study noted.

It also found that several households had new or first-time gaming members added recently. "Spend in terms of time and money to go up."

It also anticipates a sureshot boost for online education. Supplementary and mainstream educational courses seem to be the big draws, as per the study based on 1000 responses from affluent households - defined here as those with household income of ₹ 1.2 million per annum, or more. Over 90% of the responding households had annual incomes ranging between ₹ 2.5 - 7 million.

The research also termed insurance among the big gainers in the post-COVID era, the gains would be in health / medical as well as life insurance.

"Outlook for vehicle purchases in the next two quarters look more than modest considering the fact that the automotive industry has been reeling since much before the pandemic. Almost equal numbers of households plan to increase or dilute their investments in the immediate future. The demand is for MFs, stocks/bonds and gold. There seems to be a demand for personal business loans, vehicle loans and loan against property/gold," it found.