COVID-19 shakes up the emerging consumer landscape while the vaccine news boosts optimism
The pandemic triggered and accelerated a number of changes in consumer behavior. With many activities on hold due to restrictions and safety measures, consumers recreated their life online. What is more, the extraordinary circumstances made people spend less and differently. Will the COVID-19 vaccine reverse these trends?
Young consumers and rural population suffer biggest income loss due to the COVID-19 pandemic
In our survey, income trends provide the clearest illustration of the pandemic's impact. Despite government measures implemented to alleviate the economic pain of the pandemic, many of our respondents suffered a dramatic fall in income over the last 12 months. Almost a fifth of them reported income declines of over 20%. This is unparalleled in the 10-year history of our survey.
The youngest respondent group (18–29 years old) is the age group that suffered most. This is particularly interesting as in prior years young consumers have enjoyed the most robust income growth and have been the drivers of discretionary and branded consumption.
This finding echoes the conclusions drawn in our latest Global wealth report and the Global Investment Returns Yearbook 2021. Both publications indicate the young are the economic victims of the 21st century's turbulences, namely the global financial crisis and the pandemic.
How COVID-19 changed emerging consumer behavior
Improving technology, logistics and payment systems have allowed billions of consumers to shop anytime and from anywhere. In every country in our survey, the majority of consumers expect to maintain or increase the amount of online grocery shopping, continue working from home, and to maintain or increase their consumption of online education post pandemic.
Moreover, the extended adoption of healthcare technology (especially in Asia) has the potential to accelerate the rate at which emerging markets can close the gap with developed markets when it comes to quality of life.
An appetite for travel
In 2020 videoconferencing replaced business air travel, while tourism became mostly a domestic affair, with people choosing to use their own vehicles to avoid planes and airports.
As the threat of the COVID-19 pandemic recedes and travel restrictions ease, this trend could reverse. The majority of our respondents are planning a holiday abroad in 2021, with the percentage being particularly high in China (83%), Russia (82%) and Mexico (80%). This could have a significant impact on economies and industries dependent on tourism.
More saving, less spending
Our survey reveals a more cautious approach to savings: As many as 77% of our respondents plan to save more because of the pandemic. In fact, for younger people, the average was as high as 90%. This is not surprising given the necessary but unplanned increase in healthcare spending and the income loss.
Higher spending on medicine
With strong consistency across markets, our respondents expect to spend more on health and medicine in the next 12 months. Additionally, we observed an increased willingness to pay a premium for international medicine.
Healthy lifestyle gains in popularity
More than 50% of respondents from all the surveyed countries except Russia – both younger and older – have increased their consumption of healthy food since the start of the pandemic. In line with this finding is consumers' willingness to decrease their spending on beer and cigarettes, and spend more on sports equipment.
Emerging consumers intend to maintain or increase their online activities
online grocery shopping
working from home
COVID-19 vaccine is boosting optimism with young consumers being most hopeful
Our respondents view 2021 with cautious optimism, particularly in Asia. They expect their personal finances and household income to improve in the year ahead. The responses we received after the news of a vaccine showed a rise in both of these metrics, suggesting this scientific breakthrough could restore consumer confidence. Despite young consumers being the cohort that suffered the most in 2020, this group displayed the greatest optimism about the future. We expect the young, urban and wealthy group to drive consumer growth and preferences in emerging markets again.