Indian consumers one of the most optimistic globally: BCG's 2023 Global Consumer Sentiment Report

This is based on data compiled by BCG’s Center for Customer Insight, which surveyed 21,000 consumers from 21 countries around the world.

“Our global consumer sentiment study reveals India to be one of the most optimistic markets, compared to other global economies, with five out of 10 Indians exhibiting positive sentiment with regards to both macro-economic factors such as geo-political concerns, recession or inflation as well as micro factors such as personal finances and their future income outlook,” said Nivedita Balaji, Associate Director, BCG.

This positive attitude, BCG said, is translating into spending resilience, with 36% of consumers in India expecting to increase their spending in the next six months across categories, much higher than the global average of 17%.

“This positive spend outlook is being driven more so by young working adults, looking to spend on more experiential categories such as travel/leisure, entertainment as well big-ticket purchases like Auto and electronics” Balaji added.

Globally, the BCG research found, 83% of consumer resilience is driven by micro factors, compared to just 17% for macro factors. “Macro issues like geopolitical disruptions, economic challenges, and technological changes dominate the headlines. But actually, micro concerns like an individual’s job, household income and finances weigh much more heavily,” it said.

To gauge economic buoyancy, the report introduces the concept of consumer resilience, measuring the balance between spending and saving. A resilient consumer is one who maintains or increases spending without compromising savings. BCG evaluated spending and saving over the past six months, coupled with anticipated figures for the next six months, to arrive at a net resilience value.

The findings showcase a diverse global landscape, with concerns about both macro and micro issues varying widely across countries. Notably, the report places India, China, the United Arab Emirates, and Saudi Arabia as growth markets for the next one to two years. Young working adults (18 to 34 years old) and affluent, higher-income households are identified as key demographics that continue to exhibit positive spending outlooks.

Non-negotiable categories like baby food, fresh food, and packaged food exhibit strong spending, with an expectation of even higher future spending, BCG said in its report. Sustainable products and experiential items such as air travel and luxury brands also remain priorities for consumers, it added.

BCG’s research highlights the following as lessons for consumer companies, based on its findings.

Market Focus: Pursue growth in markets where consumer behaviour trends toward spending, especially in large, resilient emerging markets.

Consumer Support: Identify and support resilient consumers in your market, particularly in affluent segments that offer premiumization opportunities.

Category Dynamics: Even in countries with poorer sentiment, growth can be found in resilient, high-growth categories, especially among younger consumers.

Here are some of the report’s other key findings:

COUNTRY COMPARISON: There is no single answer regarding how consumers around the world are feeling. Concerns about both macro and micro issues are high, and both show wide ranges, from less than 50% of Indian and Chinese consumers worried about personal finances and income to more than 80% worried in Japan, Argentina, and France. Consumer sentiment in the US rests roughly in the middle.

DIFFERENCES BY AGE: The spending outlook is relatively positive among young working adults—those who are 18 to 34 years old. Sixteen percent of that group expects to change their spending, compared with 13% for those aged 35-44 years old and 8% for those aged above 44 years.

FEELING GOOD: Certain countries continue to see positive sentiment and a good spending outlook— particularly India, China, the United Arab Emirates, and Saudi Arabia. These nations will continue to see growth over the next one to two years.

WHERE CONSUMERS ARE SPENDING: Non-negotiable categories, such as baby food, fresh food, and packaged food, have demonstrated strong recent spending and are expected to see even higher spending in the future. Consumers refuse to compromise on quality in these important categories and are willing to trade up if necessary, despite inflation. Additionally, consumers are still prioritising experiential items such as air travel, vacations, and luxury brands.

WHERE CONSUMERS AREN’T SPENDING: Spending is decreasing in categories that have been declining for a few years now, such as large electronics. Also, categories such as food delivery and alcohol, whose sales were inflated during the pandemic, are seeing decreased demand as a consequence of the post-COVID cool-down.