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Spenders splurge on mobiles & maids
By agencies
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Tuesday, 12 July 2005, 19:30 IST
Mumbai: The urban Indian consumer is spending the familyÂ’s hard-earned money on? It certainly isnÂ’t on the regular monthly grocery bill. Domestic help and cell phones seem to have grabbed a larger chunk of the urban wallet.
These are some of the key findings of the 6th KSA Technopak Consumer Outlook survey 2005, an annual tracking study of 60,000 urban Indian consumers in the socio-economic group A/B across 20 cities of India done by global management consultants, Kurt Salmon Associates.
“The urban Indian consumer is increasingly becoming two-faced. She is keeping a tight check on regular expenses like grocery bills, while loosening her purse-strings on lifestyle-related products and services like household help and mobile phones,’’ said KSA’s senior consultant, Akshay Chaturvedi.
However, the pressures on the wallet have stretched beyond all limits, says the study. Consumer spends on food and grocery, eating out and vacations have grown by just 4 percent since last year.
The urban Indian household is splurging like never before. The two big-ticket items are cell phones and domestic help. The amount that an average household spends on household help has trebled in absolute terms over the last three years. Also, spends on cell phones have jumped five times in the last three years, while spends on groceries have actually come down significantly.
Expenditure on Internet, computers, laptops and mobile phones has grown by as much as 20 over last year.
This is seen as a reflection of both the growing affluence of the Indian consumer and changing lifestyles and attitudes. “An increase in spends on household help, mobile phones and the Internet is a pointer to a much greater emphasis on convenience. This will be a major driver for the future,’’ said Chaturvedi.
The 6th KSA Technopak Consumer Outlook survey 2005 says this is a clear reflection of the urban consumerÂ’s search for status symbols.
So while the overall spending across 13 categories grew by 44 percent, the total spending basket, comprising 20 categories (including groceries, consumer durables and entertainment) has seen a 9percent growth this year, as against 20 percent last year.
The study splits the average urban consumerÂ’s spending into two: regular and emerging. Regular spends, by and large, have declined, especially the share of savings and investments, food and groceries and consumer durables. The survey shows a sharp drop in the share of savings and investment in 2004-05.
“This,’’ adds Chaturvedi, “reflects the splurge rather than the save mindset of the Indian consumer. Also, the EMI (equated monthly installment) phenomenon has converted many capital expenditures such as cars and houses into revenue expenditures.’’ However, regular experiential spends such as films and theatre, books and music have shown an increase.
The urban Indian is also seeking information on the net at least once a week. The share of Internet connection in total spends has grown to 0.4 percent in 2004-05 from 0.2 percent. In absolute terms, the category spends have more than tripled in the last three years.
Around 12 percent of households in SEC AB and in the age band of 11-58 years use the Internet. Decision-making in the urban family is still rooted with the man of the house. Most decisions for household products are taken by the man, while the woman has a more significant role to play in the typically women categories, such as food, grocery and home textiles.
For big-ticket items such as cars, appliances and electronic items, the man has a much higher say compared to the woman. Despite the emergence of pester power — kids in the driving seat in urban households — the role of children in decision-making for household products is more evident only when they cross the 16-year age bracket. Movies and eating out are the two expenses where children in the age group of 8-15 years have a significant say.
Aiming to demystify the Indian woman’s preferences and shopping patterns, the study reckons that the modern urban Indian woman is more conscious of the development of self as an individual. Moving beyond just being the provider and nurturer, she seeks fulfillment of her desires and development of her persona. She aspires to be a holistic individual — striking a balance between self, family and career, says the survey.