Consumer’s Purchasing Behavior modified due to COVID-19

I would like to quote Milton Friedman in reference to the title of the topic – “Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government”. Is this true after all or is it just a perception of one’s biased opinion.

The novel Coronavirus also known as Covid 19 has created chaos all over the world. Everyone is truly suffering, it is as if god has bestowed his curse upon mankind, the days never really seem to end and the night slithers like a sly snake into a delirious day. People have experienced panic in these dooms days and the lifestyle changes will greatly have an effect on the ever evolving economy. The minute you switch on the television and watch the news where we notice that there is no point of positivity to be seen, the number of deaths and the diagnosed patients with corona just seem to be climbing up like jack who climbed the green bean stock which just never really seemed to end. Covid 19 has trapped people into a never ending whirlpool. The monotony of everyday just does not seem to end. We are truly living in an invincible nightmare which seems to never leave our minds even though our minds have already woken up to the grave reality of the present and the unforeseeable future which we will witness. The consumer behavior would be quite depressed due to the lockdown. The current GDP growth rate is 1.9% which has been the lowest in comparison to the last few years.

The economy is facing a critical crisis from the last three months and the consumers are left in a state of confusion. The post Covid- 19 scenario is not going to be sweet after all, we will definitely have to work our way up the ladder to get back to the standard scenario. Corona is going to have a crazy effect on each worker be it the daily domestic cleaner and the delivery men from the different e-commerce sites or the IT personnel and the business man or even the common consumer. And the effect it shall have on the consumers would be long lasting.  One will witness a slump in the graph of consumers purchasing cycle.

In many areas of the industry the overall purchase rate of the products would go down, people will become frugal and cautious consumers. There would definitely be a hike noticed in the graph when it comes to consumption of sanitary products to maintain an adequate hygiene and for decontamination and also one would see a surge in the e-commerce websites selling essential goods as people will become more dependent on goods which are easily accessible via home delivery. One would definitely see a slug in the food industry, especially for food joints, restaurants and cafes etc. , it would be a hard time for them to keep up in the competitive game which the industry holds, as one will see a sink in the number of consumers consuming food products, they would rather prefer healthy home cooked food. The great rush would also be noticed in the number of app downloaders who would prefer online transactions via paytm, google pay and other modes instead of COD and paper money.

One would notice a drastic change in consumer behavior where cautious consumers would prefer quality over quantity. People would start preferring private transport over public, they would go the extra mile to seek safety instead of taking a risk as all know Covid 19 won’t be leaving us any time soon. Most startups would have a hard time getting back on track eg- In Bangalore the government allowed 30% of the staff that is the essential staff to work from the office, but the employees denied the orders and instead chose to work from home putting their safety and security above all. In this case one can definitely say “Health is Wealth”.

It will take time for the revival of the economy and to see the surge in the growth rate as people won’t be easily persuaded even after being assured by the government that it is safe to go out. People would definitely be worried incase if a devastating economic crisis would come and hence would not be ready to invest a huge amount of their income in mighty assets like cars or houses or other big investments.

There would be a  drop noticed in the investment rate by consumers, people will not be investing their money in anything, it will take time for the consumers to gain confidence in the market and also to become an assured and hopeful  buyer again in the market, rather one would see a hike in the savings of each family in these crucial times as people will become more conscious and take precautions in the precarious and eye opening times which can occur in the near future and hence will look forward towards saving their money.

One can also notice a surge in app downloads be it newspapers or even apps which provide consumers with groceries and other essential and non-essential items. As the whole situation won’t normalize before August people will start being dependent on services which are offered at their doorstep, people will start becoming dependent on the facilities which companies have to offer from home and it will be the walk- in markets which will be affected the most and face huge losses as they  are dependent on consumers who shop from them on a daily basis . Eg – Most housing societies handover a list to the local grocery store which offers home delivery in the hard times of corona and actually find this facility to be quite comfortable. There has been a surge in the app downloads of applications like Grofers , Big Basket, Flipkart and Amazon etc.

The question to note here is has the situation surrounding corona virus and its effect on the economy and customers really been hyped which has caused fear to grip the minds of every individual or are we looking at a crisis which will be looming on for a long time and will create drastic changes all over the world.

ABDHI UPADHYAY