Turn the Tide Unlock the new consumer path to purchase - Deep-dive: E-Commerce
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Turn the Tide Unlock the new consumer path to purchase Deep-dive: E-Commerce June 2020
Consumer behavior The new normal Businesses must unlock
Copyright © 2020 by Boston Consulting Group. All rights reserved.
has fundamentally has transformed the the new normal to help
changed purchase pathway revival
Turn the Tide
Unlock the new normal
Great [leaders] rejoice in adversity just as brave
soldiers triumph in war
—Lucius Annaeus Seneca
Covid-19 is a global
pandemic
However to win in the
current situation,
companies need to
tailor strategies to
today’s unique context
and look through layers
Facebook company Turn the Tide
Unlock the new normal
Despite this pandemic, signs of recovery are starting to show
Pandemic spread in different degrees across the globe India gradually moving towards opening up economy3 ; E-
commerce unrestricted for all categories from Lockdown 4.0
As of 22 June 2020 Based on guidelines Lockdown stages
released on 17 May Industries unrestricted
1.0 2.0 3.0 4.0
~8.9M 188 Industry
Education offline
25 Mar 20 Apr 4 May 18 May
(across all lockdowns)
Media
Confirmed cases globally1 Countries with cases1 Travel & tourism1
Energy & utilities
Oil & gas
Public transportation2
Financials
Fashion, luxury & other
UK retail
Insurance
Russia
Other services
0-3 days France Italy Education (online)
Spain
Days of doubling cases2
USA China Japan Auto and components
As of 05 June, 2020
Iran Consumer staples
3-6 days India
South
Building materials
Korea Food/drug retail
6-14 days Construction/infra Pharmaceuticals
Consumer durables &
14-30 days discretionary
Health services
Brazil
Forest products Telecom
>30 days
Chemicals Agriculture
Machinery
~0.42M ~0.23M ~0.17M IT services
Goods transportation &
logistics
Total no. of cases1 Recovered1 Active1 IT hardware
Metals & mining
As of 22 June 2020 Packaging
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Partially
Fully restricted Unrestricted
restricted
Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards and hence imperfect measures Unlock the new normal
1. . [NDTV Corona Virus - Live Statistics Data - accessed on 22nd June, 2020] 2. [BCG Analysis - No. of doubling days based on 7 day CAGR, Source: John Hopkins CSSE data] 3. [Ministry of Home Affairs (MHA) - Do not apply for containment zones, States and Union Territories
may prohibit certain activities , BCG Analysis]
The pandemic has impacted the socio-economic fabric of India
Rapid acceleration of E-commerce adoption expected with consumers avoiding stepping out to shop
The pandemic has created a never-before Social distancing and structural Uncertainty around income and Consumer priorities being
focus on health & safety interventions will drive faster recovery weakened demand potential in near re-calibrated; certain behavior changes
term will stick long term
HEALTH & SAFETY PUBLIC POLICY ECONOMICAL SOCIAL
1 4 7 11
Public Health Income Uncertainty Consumer Sentiment
Measures • 60% of total household expenditure in ~140Mn+ online shoppers in India11;
COVID-19 Cases hotspots; 45% of consumption in Consumers showing higher propensity to
0.42M+ total cases in India1 Social distancing enforced via nation-
wide lockdown hotspots non-essential6 spend on online channel even for
• 198M workforce employed in hotspot traditionally offline categories12
5 districts7 12
2 Media, Smartphone Usage
Industry 8
Guidelines Inflation / Price Indicators8 16% increase in smartphone screen
Web Trends
Major categories for E-commerce (eg. • 70 bps drop in CPI time (May vs Pre-COVID)13
~120% spike in online searches on health
Consumer electronics, durables, • 130 bps drop in WPI Globally, ~3Bn average MAUs across
& immunity in India post COVID2
apparel and CPG) in unrestricted Facebook, WhatsApp, Instagram &
category as per latest government 9 Messenger14
Trade / Logistics Indicators9:
3 guidelines4 13
• 35% decline in exports and Mobility
29% decline in imports 40%+ reduction in number of visits to
Demand of health products 6 • 14% decline in retail freight traffic public places due to lockdown and social
49% consumers intend to buy more Monetary distancing16
vitamins, herbs and supplements in the Relief Measures 10 14
coming days3 ~$13Bn infusion by monetary relief Market Sentiment Indicators10: Web Traffic trends
measures by RBI5 20% decline in Nifty index since 1st Feb Internet peak traffic saw 40% rise in
March in India15
Source: 1. [NDTV Corona Virus - Live Statistics Data - accessed on 22nd June, 2020] ; 2. [Online Search Trends (India)] 3. [BCG COVID-19 Consumer Sentiment Survey, April 30- May 03 (N = 1,327)] 4. [Ministry of Home Affairs (MHA), Govt. of India; Do not apply for
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containment zones, States and Union Territories may prohibit certain activities] 5. [RBI Notification – 17th April] 6. [BCG Analysis, Source: Nielsen-Indicus database 2017-18, Hotspot list as of 15th April (MoHFW), data compiled in 2017-18 , Press Search] 7. [BCG
Analysis, Source: Hotspot list as of 15th April (MoHFW), PLFS workforce survey 2017-18, Census 2011-12 district workforce report] 8. [CPI (MOSPI), WPI (Office of economic advisor) – Change comparison Feb 20 vs March 20] 9. [Import-Export movement
(Ministry of Commerce & Trade), Railway Traffic (Ministry of Railways) – YoY decline in March'20] 10. [Bloomberg data - As of 23-April] 11. [Source: Forrester Report; Forecasted for 2019] 12. [Source: BCG COVID-19 Consumer Sentiment Survey 13. [BARC Nielsen
– TV + Smartphone consumption report during COVID, 7th May 2020] 14. [Facebook Q1 2020 Earnings Release/ Call Transcript – 2.6Bn users just on Facebook] 15. Press Search [News18] [Internet Traffic in India Sees 40% Spike in March Due to COVID-19 Unlock the new normal
Lockdown: ACT Fibernet] 16. [Source: COVID-19 Community Mobility Report – India – Apr 17, 2020]
‘Social distancing’ has been the key to fight disease globally and in India;
making it the new way of living
Social distancing advocated as key measure to India is actively following social distancing
control COVID spread guidelines
India has observed a stark drop in number of visits
CDC across public places
RETAIL & RECREATION WORKPLACE
Johns Hopkins Reduction in number Reduction in number
University ~85%2 of visits compared to ~65%2 of visits compared to
baseline baseline
South Korea keeps social distancing post
South Korea
COVID-19 -qz.com This is reflecting in consumers preferring digital for buying and
payments to avoid disease vectors like cash and POS3
Hong Kong extends social distancing
Hong Kong
measures as cases drop -Bloomberg
~40- Consumers expect to ~45- Consumers increased
Globally strict measures followed to ensure social distancing increase E-com spend usage of digital payment
50%4 50%4
Up to 15 April 2020 in next six months options during lockdown
Closed public Closed
10+ transportation1 19+ workplaces1
Countries Countries
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1. [Oxford COVID-19 Government Response Tracker] 2. [COVID-19 Community Mobility Report (April 17, 2020) - The baseline is the median value, for the corresponding day of the week, during the 5-week period Jan 3–Feb 6, 2020]; 3. Press Search 4. CCI Unlock the new normal
Consumer sentiment survey
Even in challenging times, historically there are organizations that have found
opportunities to grow
18% of Indian companies1 improved both growth & margin during Globally, companies have weathered historical downturns and
the 2008-09 Global financial downturn, while 37% declined in both2 emerged victorious by recognizing opportunities3
Increasing sales growth ALIBABA GROUP
Launched C2C marketplace 17 years of
A Taobao in 2003, driven by continuous growth
consumer behavior changes due
21% 18% to SARS; propelling Taobao on a
path of 17 years of continuous ~$430 Bn GMV (Taobao)
growth
Shrinking Expanding
EBIT margin EBIT margin
B
3-5 X Growth in listing of new B2B businesses on
37% 24% 3-5 Alibaba in 2003 compared to pre-SARS rate
times Overall, Alibaba grew from 400 employees in 2003 to
100,000 in 2020
Falling sales growth
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1. [Indian public companies with Market Cap > $10M, excluding Banks, Insurance, Asset Management companies] 2. [BCG Analysis: Based on revenue growth & EBIT Margin growth (from FY'09 to FY'12) compared to three-year pre-downturn baseline (from Unlock the new normal
FY'06 to FY'09); Source: S&P Capital IQ Financial Statements] 3. [Press release, expert interviews; BCG analysis, Statista]
As we move towards recovery, near term potential exists in pockets; need to
look at the de-averaged picture
25 states have less than 20% active cases1
Data as of 09 June
Very High : >=10% of pan
India cases
80% cases
High : >=3%,
Spending sentiment translating differently across categories
Essential categories have more positive outlook; mixed sentiment for electronics and discretionary spends
Right strategic actions needed to win disproportionate share Marketers will need to identify pockets of opportunities
“Growing” Categories Wave 1 Wave 2 Wave 3 'Shrinking' Categories Wave 1 Wave 2 Wave 3
Categories with net increase in spends 23-26th Mar 17-20th Apr 30 Apr-03rd May Categories with net decrease in spends 23-26th Mar 17-20th Apr 30 Apr-03rd May
Fresh foods Mobile electronics
Staples Electronics Non-mobile consumer electronics
Luxury brands/products
Household care products
Daily essentials Cosmetics, makeup, perfume
Personal care products
Apparel/fashion
Utilities (electricity, water) Packaged food & beverage
Discretionary
Mobile services spends Tobacco & smoking supplies
Home wifi connection Alcohol
Food delivery
Paid OTT subscription
At-home
Sports equipment & clothing
entertainment DTH services
Home furnishings and décor
Toys & games
Home Home construction/renovations
Savings Vacation/leisure travel
Saving/
Investments Insurance Business travel
Travel Public transport
Preventive diagnostics/test
Spas, theme parks, concerts
Vitamins, herbs, supplements
Restaurants
Medical procedures OOH
Health Entertainment Movies at cinema hall
First-aid Scooters/bikes
Education Auto Cars
Education
Consumer sentiment Positive Neutral Negative
Note: Question text: “How do you expect your spend to change in the next 6 months across the following areas?” Categories with Top 2 Box > (5% more than average) classified as winning categories. Categories with Bottom 2 Box > (5% more than average) Turn the Tide
classified as losing categories. Categories neutral across waves: Baby/children's food, Non prescription medications, Prescription medicines, House rent, Home purchase & Home loans. Unlock the new normal
Source: BCG COVID-19 Consumer Sentiment Survey March 23-26, April 17-20 2020, April 30-May 03 2020 (N = 2,106, N = 2,324, and N=1,327 respectively)
Pre-COVID, E-commerce in India was small but growing fast
E-Commerce in India was still small but
Opportunity for increased penetration across all categories
growing fast among major economies
Value ($B)
% of online sales
Overall online
+33% Segment-wise split of online sales (In $ Bn – 2019) w.r.t total retail
31 sales penetration
24 sales (2019)
14 18
10 Consumer Electronics 14 75% by 30%
GMV
Apparel & Footwear 7 6%
2015 2016 2017 2018 2019
CPG - Food 2 0.3%
(CAGR 15-19(E), %) 4% 27%
CPG - Personal Care 1 7%
25% Appliances 2 Significant
33% CAGR; higher than other 9%
major markets opportunity for
Media 2 26% growth across
# of online buyers (Mn) Homeware 1 4% categories to meet
Driven by 2.6X 143 global benchmarks in
Other 2 2%
growth in number of online penetration
online buyers in India 54 Total 31 4%
(2015-2019)
2015 2019
Source: BCG Analysis; Online Retail Forecast Forrester report (Includes the purchase of merchandised goods and services. Does not include travel and hotel categories. Excludes other services, digital media spend and other financial transactions. Online retail Turn the Tide
sales in China and India include both business-to-consumer (B2C) and consumer-to-consumer (C2C) sales; 2019 values as per Forrester forecast; Consumer Electronics includes Computer hardware and software, Consumer electronics and smartphones; Food Unlock the new normal
refers to Grocery;COVID-19 has accelerated E-commerce adoption in India by 2-3 years
India now expected to have 300 Mn+ online shoppers by 2023
Estimated number of online shoppers in India (In Mn) – Post-COVID vs Pre-COVID
Pre-COVID, India was expected to have 300 Mn online shoppers by 2025;
140-150 Mn online shoppers In the aftermath of the pandemic, number of online shoppers likely to
in India today reach 300 Mn by 2023
375-400
400
280-320 300-320
300
240-260
200 140-150
100
50-60
0
2015 2019 2023 (F) 2025 (F)
Pre-COVID
Post-COVID
Source: Forrester report, Expert interviews and BCG analysis Turn the Tide
Unlock the new normalTHIS PANDEMIC HAS DEEPLY
IMPACTED THE MIX OF
BOTH ONLINE BUYERS AND
CATEGORIES BOUGHT
ONLINE
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Unlock the new normalDifferent consumer spend pools have opened up for online to tap
# of Estimated How the pandemic has impacted the spend pools
consumers in spend in $Bn
Mn (2019)1 (2019)2
Consumers with any spend online
• Pool will increase with new adopters and wallet
Online spend of deepening
Online spend pool will grow
~$30 Bn
online buyers • Higher need for friction-less experiences with
growing digital maturity
140-150 Mn
• Online share of wallet will grow as propensity to
Offline spend spend online for traditionally offline categories
of online $75-100 Bn increases
buyers • Need for contact-less convenience will drive
growth Increase in online spend
Consumers will increase
40-50% their online spend
Internet users
but no online
Offline spend • Forced adoption of online shopping driven by (includes both new and
lockdown; early trends show high likelihood to
spend
of digitally existing online buyers)3
400-420 Mn $275 Bn+ continue
savvy but non- • Overall growth in digital maturity will create
online buyers comfort for online shopping
1. On a base of 540-570M Internet users 2. On a total base of $852bn in India (2019) ; Source: Forrester Report, BCG Analysis; Excludes travel and hotel categories, services, digital media spend and other financial transactions; 3. Question text: “In the next 6 Turn the Tide
months, how do you expect your online spend for the following types of products to change?”; Source: BCG Analysis - BCG COVID-19 Consumer Sentiment Survey (India), April 30-May 03 2020, N=1327 Unlock the new normal40-50% consumers expect to increase online spend, even for traditionally offline
categories
% consumers expected to increase/ retain online spend in next six months
31% 25% 38%
29% 28%
32% 27% 34%
31%
31%
55% 60%
52% 51% 46% 47% 51%
39% 43% 44%
Mobile phones Consumer durables Apparel/ fashion Home appliances Household Personal care Cosmetics, Packaged food Fresh foods Staples
care products products makeup, perfume & beverages
High online Historically Low online
propensity moderately online propensity
Same More than usual
Note: Question text: “In the next 6 months, how do you expect your online spend for the following types of products to change?” Turn the Tide
Source: BCG Analysis - BCG COVID-19 Consumer Sentiment Survey (India), April 30-May 03 2020, N=1327 Unlock the new normalHigh willingness to increase online spend observed across all demographic segments
% of consumers looking to increase / decrease / retain online spends in the next 6 months – Demographic profile1
Similar trends across both SEC A and SEC B 45-50% consumers across all age groups are planning Similar trends in increased online
consumers with positive / neutral sentiment to increase spends on online channel spending propensity observed for both
towards online spends metro and non-metro cities
For select categories like
For select categories like
35 cosmetics & consumer
mobile, apparel and food 45
50 durables older consumers 48
52 affluent consumers have 48 49
(26+) have a more positive
higher affinity to spend
spending outlook
44
36 33
29 31 31 30
20 21 18 21 19 19 21
SEC A SEC B 18-25 yrs 26-35 yrs 36-45 yrs Metro Non-Metro
% may increase spends on online channel (6M) % may spend the same on online channel (6M) % may decrease total spends on online channel (6M)
Note: Question text: “In the next six months, how do you expect your online spend on the category X to change as compared to before lockdown? Turn the Tide
Source: BCG Analysis - BCG COVID-19 Consumer Sentiment Survey (India), April 30-May 03 2020, N=1327 Unlock the new normalSurge in new adoption across categories; new online buyers likely to continue
20-30% new online buyers across most categories; 80 -90% likely to continue
New online buyers as a % of total online and offline buyers (Post-COVID)1
Key drivers for new adoption
28% 28%
26%
24% 24% 23%
20% 21% With higher need for social distancing,
18%
11% consumers preferring contact-less purchase
Mobile Consumer Apparel/ Home Household Personal Cosmetics, Packaged Fresh foods Staples
phones durables fashion appliances care care makeup, food &
products products perfume beverages
Non-availability of other channels during
% of new online
buyers likely to lockdown for certain categories
continue post 100% 91% 90% 88% 82% 83% 86% 78% 82% 80%
lockdown2
1. Q . Which statement best describes your behavior about ? 2. Q. You mentioned that you have started online purchase of since the Lockdown. How likely are you to continue Turn the Tide
purchasing” Source: BCG Analysis - BCG COVID-19 Consumer Sentiment Survey (India), April 30-May 03 2020, N=1327 Unlock the new normalAs traditionally offline spends move online, higher need to resolve erstwhile barriers
with new models
Trends from China indicate consumers will
New online shoppers across categories will expect their traditional barriers to be be eager to try new online models
solved even in their online journeys incorporating the positives of offline
Top reasons for not buying select category online Illustrative % of consumers planning to spend more / same on
Mobile1 Durables2 emerging E-commerce models5
35+ yrs, female, non-metro % urban consumers 35+ yrs, male, non-metro
% urban consumers
Immediate need for product 26% Easier service/ repair online 34%
Traditional
45% 39%
E-commerce
Difficulty in returns 17% Difficulty in returns 27%
Easier service/ repair online 13% Immediate need for product 20% O2O 43% 32%
Pre-COVID Pre-COVID
Social group
40% 40%
Fashion3 Food & Grocery4 purchaseTo win a share of this
growing opportunity,
imperative to understand
the most fundamental
change from COVID:
Change in consumer
behavior
Copyright © 2020 by Boston Consulting Group. All rights reserved.
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Unlock the new normalThe pandemic will create different types of changes in consumer behavior – some
more long lasting than others
REVERSAL OF ACCELERATION OF EXISTING NEW
PAST TRENDS TRENDS HABITS
Wild cards; likely to be High potential Stickiness of change is
temporary surges permanent shifts in behavior yet to be determined
These are complete reversal of how consumers Consumer behavior was already moving towards Entirely new habits developed during the pandemic
were behaving in the past these trends and while social distancing
These changes have mostly risen out of a constraint or With the pandemic, the trends have gained Consumers who gain positive reinforcement out of the
fear vs. convenience or choice momentum and accelerated habits may retain them
These trends will likely last in line with recovery Positive reinforcement is essential for consumers to Ecosystem facilitating and feeding these changes can
period adopt them in the long term make it last longer
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Unlock the new normalNew trends of consumer behavior emerge across categories
This will deeply impact purchase pathways in the new normal
REVERSAL OF PAST ACCELERATION OF NEW
TRENDS EXISTING TRENDS HABITS
1 5 9
Bringing the Embracing digital services &
Remote way of living
Outside Inside experiences
Social 6
Accelerated adoption of e-
10
'D'o 'I't 'Y'ourself
Distancing commerce & O2O
7 11
Superior hygiene & clean
Strive for Health & Wellness
living: a new norm
Health &
Hygiene 2
Trust in brand
8
Rise of 'Smart shopper'
above all else
3
Trading down &
bargain hunting
Income
4
Uncertainty Shopping for Utility
Wild cards: likely to be temporary surges in line High potential permanent shifts: linked to Stickiness of change is yet to be determined
with recovery period positive reinforcementTHE PURCHASE PATHWAY
FOR CONSUMERS IS
UNDERGOING
FUNDAMENTAL CHANGES
ACROSS CATEGORIES
UNDERSTANDING THIS WILL
BE KEY TO TAP EMERGING
OPPORTUNITIES
Turn the Tide
Unlock the new normalMobile
In Summary:
Unlock the new normal
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Copyright © 2020 by Boston Consulting Group. All rights reserved.8 consumer trends will have a higher impact on the Mobile category
REVERSAL OF PAST ACCELERATION OF NEW
TRENDS EXISTING TRENDS HABITS
1 5 9
Bringing the Embracing digital services &
Remote way of living
Outside Inside experiences
Social 6
Accelerated adoption of e-
16% higher time spent on 94% use mobile phones while watching
Distancing smartphones vs pre-COVID5 commerce & O2O TV7
55%
70% of those with a positive spending outlook intend to increase spends on
on mobiles likely to stick with the brand in 70%4 urban consumers for mobile
mobile phones in online channel expected to be digitally influenced
mind in the near term3 in the next 6 months2
Health &
Hygiene 2
Trust in brand
8
Rise of 'Smart shopper'
above all else
3
55%6 smartphone buyers used online
Trading down & 1 in 2 of those who plan to increase spends research pre-COVID; this is expected to
bargain hunting on mobile are expecting discounts/offers1 increase
Income
4
Uncertainty Shopping for Utility
5-10% increase in salience of functional
purchase triggers4 for mobiles
Wild cards: likely to be temporary surges in line High potential permanent shifts: linked to Stickiness of change is yet to be determined
with recovery period positive reinforcement
1. [Q. “Please state the reason to spend more/ less in near future?” Source: BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020, N=1,327] 2. [Q. “In the next 6 months, how do you expect your online spend for the following types of products to change?”
Source: BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020, N=1,327] 3. [Q. “In the next 6 months, how do you expect the choice of your brand to change" (for those increasing spends) Source: BCG COVID-19 Consumer Sentiment Survey March 23-26,
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Unlock the new normal
N=2106} 4. [Expert interview and BCG analysis] 5. [BARC Nielsen – TV + Smartphone consumption report during COVID, 7th May 2020] 6. [Percentage of the smartphone users; BCG CCI Mobile consumer study, N=2000] | 7. [GWI, All Internet Users 18-45, Coronavirus
Research | April 2020 Multi-market research wave 2 and Core Research Respondents on COVID-19 from Q1-Q4 2019]CONSUMER BEHAVIOR CHANGES IN MOBILE PATH TO PURCHASE
With higher value consciousness, functional triggers to become more
1 important 5-10% increase expected in salience of functional purchase triggers for
mobiles1
2 Higher average replacement time in near-medium term 8-10% increase in replacement time in the near-medium term for mobiles1
3 Salience of digital influence for mobile will rise even more ~70%1 urban consumers for mobile expected to be digitally influenced
post COVID; up from 55-60%2 pre-COVID
CONSIDERATION
DISCOVERY &
4 With social distancing, importance of online research to increase 55% smartphone users researched online pre-COVID3; expected to increase
With a value seeking mindset, importance of pricing as a choice
5 driver to go up 40% of consumers planning to decrease spends will buy a cheaper variant4
With changing use cases, consumers will be more feature
6 conscious ~23% consumers chose features in top 3 choice drivers pre-COVID;
expected to increase5
Certain features related to in-demand use cases may become
7 more important ~16% increase in screen time spent on video streaming post-
COVID; leading to increasing need for higher video stability etc.6
Uncertainties due to pandemic may lead to some 70% consumers with positive spending outlook likely to stick with
8 consumers experimenting less brand choice already in mind 7
PURCHASE PURCHASE
Online share for mobile phones (in value terms) likely to reach
9 Affinity for online will accelerate even more
45% in the next 2 years1; up from 38% pre-COVID9
Consumers will expect positives of offline along with safety Lack of product experience before buying has been one of
10 and convenience of contact-less purchase the key barriers to online purchase 8
With social distancing, consumers will want to
POST
Higher need for at-home or virtual post
11 sales service limit store visits for after-sales service
1. [Expert interview and BCG analysis]; 2. [BCG CCI Digital influence Study 2017 , N=18,000, BCG CCI Mobile consumer study, N=2000 and BCG analysis] ; Data for urban consumers shown 3. [Percentage of Smartphone users; Source BCG CCI Mobile consumer study and BCG
analysis, N=2000]; 4. [Q. “In the next 6 months, how do you expect the choice of your brand to change” (for those decreasing expenses) Source: BCG COVID-19 Consumer Sentiment Survey March 23-26, N=2106]; Data shown for urban consumers; 5. [Considering average of
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Rank 1-3 responses. Q: “Thinking about your most recently purchased mobile phone, can you tell me the 3 most important factors which helped decide what product should be bought?" Source: CCI Survey , N=840]; 6. [BARC Nielsen – TV + Smartphone consumption report Unlock the new normal
during COVID, 7th May 2020] 7. [Q. “In the next 6 months, how do you expect the choice of your brand to change" (for those increasing expenses); Source: BCG COVID-19 Consumer Sentiment Survey March 23-26, N=2106 ] ; Data shown for urban consumers; 8. [Q: "List of
statements read out for 4 channels and asked to choose which channels are applicable to each of the statement"; Source: CCI Survey, N=840] ; Data shown for urban consumers; 9. . [IDC India Mobile Phone Tracker ; % by value]In Summary: Apparel
7 consumer trends will have a higher impact on the Apparel category
REVERSAL OF PAST ACCELERATION OF NEW
TRENDS EXISTING TRENDS HABITS
3 6
55-60% urban consumers Embracing digital services &
expected to be digitally Remote way of living
influenced4 experiences
Social 40% of consumers are
4
Accelerated adoption of e- 79% consumers are unwilling to go out of
house, except work5; higher need for casual
Distancing planning to increase online
spend on apparel7
commerce & O2O / comfort in wardrobe vs social occasion
clothing
5 7
32% consumers are planning to Superior hygiene & clean
Strive for Health & Wellness
trade down in apparel1 living: a new norm
Health & 40% of consumers planning to 1.4x rise in time spent on
Consumer want retailers to focus on
Hygiene increase spend will expect
discounts/ promotions during
fitness apps8; increase in
high standards of store hygiene post the
demand for activewear/
apparel shoopping2 pandemic (57% globally)6
athleisure
1
Trading down &
bargain hunting Purchase triggers expected to become
Income more "functional" vs. occasion led ;
15% consumers shopped due to
2
Uncertainty Shopping for Utility
functional reasons pre-COVID3;
expected to rise significantly
Wild cards: likely to be temporary surges in line High potential permanent shifts: linked to Stickiness of change is yet to be determined
with recovery period positive reinforcement
1.. [BCG COVID-19 Consumer Sentiment Survey, Question: “In In the next one how do you expect the choice of your brands to change?”; April 30-May 03 2020 (March 23-26, April 17-20 2020, April 30-May 03 2020 (N = 2,106, N = 2,324, and N=1,327 respectively)), 2.[BCG COVID-19 Consumer Sentiment
Survey, Question Text: “Please state the reason to spend more/ less in near future?” , Source: BCG COVID-19 Consumer Sentiment Survey, April 30-May 03 2020 (March 23-26, April 17-20 2020, April 30-May 03 2020 (N = 2,106, N = 2,324, and N=1,327 respectively))], 3. [CCI Survey and BCG analysis, Question
Text: Occasion/reason for your last purchase in given apparel subcategory?, N=1218],4. Estimation for 2021 from expert interviews and BCG CCI Digital Influence Study 2017 analysis (N=18,000 per year),5. [BCG COVID-19 Consumer Sentiment Survey, Question Text: "How much do you agree with each of the
following statements about the coronavirus? Combined Strongly agree and somewhat agree", April 30-May 03 2020 (March 23-26, April 17-20 2020, April 30-May 03 2020 (N = 2,106, N = 2,324, and N=1,327 respectively))], 6. BCG COVID-19 Consumer Sentiment Survey, April 17–20, 2020 (N = 5,729 across
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China, Germany, Italy, UK, and US; unweighted), 7. [BCG COVID-19 Consumer Sentiment Survey, Question Text:" In the next one month, how do you expect your online spend Apparel/ fashion (e.g., clothing, handbags, footwear) to change?”; April 30-May 03 2020 (March 23-26, April 17-20 2020, April 30- Unlock the new normal
May 03 2020 (N = 2,106, N = 2,324, and N=1,327 respectively)), 8.[Nielsen, Nielsen TV and Smartphone report, Week of March 30 vs Week of April 27]CONSUMER BEHAVIOR CHANGES IN APPAREL PATH TO PURCHASE
Shopping triggers will be more functional as opposed to being led
41% consumers shopped apparel due to celebratory reasons pre-COVID1;
1 by occasions likely to decrease with 57% consumers having stopped or reduced going out
to meet friends10
Some consumers will seek attractive pricing or may trade down in
40% of consumers planning to increase spend will look for discounts2
CONSIDERATION
2 choices
DISCOVERY &
Casualization of wardrobe and higher demand for comfort with a With 79% consumers unwilling to go out of house except work,
3 more “stay-at-home” lifestyle
casual wear expected to become a larger part of wardrobe3
Given increasing focus on health and wellness, there will be Consumers are becoming increasingly health conscious; 1.4x increase
4 higher demand for fitness wear
in time spent on fitness apps4
With more time online, digital influence will rise for ~55-60% urban consumers for apparel expected to be digitally
5 apparel shoppers influenced post the COVID; up from 45-50% pre-COVID5
Consumers will expect higher standards of hygiene as
6 they return back to stores 57% consumers globally want retailers to focus on high
standards of store hygiene, once the lockdown is over6
PURCHASE
Surge expected in preference for online apparel
7 shopping 40% consumers are planning to increase
online spend on apparel7
Consumers will need feel/fit/social experience 40% consumers cited lack of touch and
8 along with a new need for contact-less feel as a key barrier to online apparel
convenience in shopping shopping, pre-COVID8
PURCHASE
Core need for peer recommendations in
POST
9 apparel shopping may be fulfilled digitally, 1 in 2 consumers rely on peer
with growing virtual connect reviews and recommendations9
1. [CCI Survey and BCG analysis, Question Text: Occasion/reason for your last purchase in given apparel subcategory?, N=1218]; 2. Question Text: “Please state the reason to spend more/ less in near future?” , Source: BCG COVID-19 Consumer Sentiment Survey, April 30-May
03 2020; 3. [BCG COVID-19 Consumer Sentiment Survey, Question Text: "How much do you agree with each of the following statements about the coronavirus? Combined Strongly agree and somewhat agree", April 30-May 03 2020; 4. [Nielsen, Nielsen TV and Smartphone
report, Week of March 30 vs Week of April 27]; 5. Estimation for 2021 from expert interviews and BCG CCI Digital Influence Study 2017 analysis (N=18,000 per year); 6. BCG COVID-19 Consumer Sentiment Survey, April 17–20, 2020 (N = 5,729 across China, Germany, Italy, UK,
Turn the Tide
Unlock the new normal
and US; unweighted); 7. [BCG COVID-19 Consumer Sentiment Survey, Question text: "Which statement best describes your usage behavior since the Lockdown?] April 30-May 03 2020; 8. BCG-Facebook Fashion forward 2020 report; 9. [CCI Survey and BCG analysis, Question
Text: Which of the following sources of information influence your decision the most for purchase of apparel?, Source: CCI Survey and BCG analysis]; 10. [BCG COVID-19 Consumer Sentiment Survey, Question Text: "How much do you agree with each of the following
statements about the coronavirus?", "Which statement best describes your behavior since the Lockdown?", Source: BCG COVID-19 Consumer Sentiment Survey, May 18-May 23 2020Staples
Fresh Food
Packaged Food
CPG- Food
In Summary:
Copyright © 2020 by Boston Consulting Group. All rights reserved.7 consumer trends will have a higher impact on the CPG (Food) category
52% consumers have
increased use of social media;
REVERSAL OF PAST ACCELERATION OF NEW more product discovery on
TRENDS EXISTING TRENDS HABITS social media e.g. recipe
videos, food reviews6
1 4 6
Bringing the Accelerated adoption of e-
Remote way of living
Outside Inside commerce & O2O
Social 2.7x rise in viewership of cooking recipes
80% consumers who have purchased food 7
related sub -categories online during the 'D'o 'I't 'Y'ourself
Distancing owing to home cooking1
lockdown are willing to continue2
100% spike in online research
2 5
of "how to" trends7
Trust in brand
above all else Strive for Health & Wellness
Health &
65%+ consumers are planning to stick to 49% consumers to increase spend on
Hygiene the choice of the same brand3 Health & Wellness products5
3
Trading down &
bargain hunting
Income 28% consumers are planning to trade
down4
Uncertainty
Fresh Food
Staples Wild cards: likely to be temporary surges in line High potential permanent shifts: linked to Stickiness of change is yet to be determined
Packaged Food with recovery period positive reinforcement
1. [Nielsen, Nielsen TV and Smartphone report, Week of March 30 vs Week of April 27]; 2. [BCG COVID-19 Consumer Sentiment Survey, categories considered: Fresh Food, Packaged F&, Makeup, Staples, Personal Care, Home Care & Baby Care, Question text: “ In the next 6 months, how do you expect your online spend for the following types of products to
change?”, April 30-May 03 2020; 3. [BCG COVID-19 Consumer Sentiment Survey, Question Text: "In the next one month (CPG) how do you expect the choice of your brands to change?”; April 30-May 03 2020 ; 4. BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020; 5. [BCG COVID-19 Consumer Sentiment Survey, Question Text: "How do you expect
your spend to change in the next 6 months across the following areas?”; April 30-May 03 2020; 6. [BCG COVID-19 Consumer Sentiment Survey, Question Text: " Which statement best describes your usage behavior across the following areas?", April 30-May 03 2020; 7. [Online Search Trends (India), 2nd week of Feb to 4th week of April]CONSUMER BEHAVIOR CHANGES IN CPG (FOOD) PATH TO PURCHASE
Consumers will trade up in staples and selectively trade up 31% consumers planning to trade up across staples and packaged food;
1 /down in packaged food owing to a more value conscious, yet while 28% are planning to trade down in packaged food1
quality focused mindset
CONSIDERATION
DISCOVERY &
2 Changes in basket with a more at-home, do-it-yourself 2.7x rise in viewership of cooking recipes owing to home cooking2
lifestyle
Surge in demand for specific products/variants with an
3 increased focus on health, hygiene, and wellness 49% consumers to increase spend on Health &
Wellness products3
PURCHASE
Consumers will look for buying avenues which provide 45+% consumers planning to increase
4 contact-less convenience while fulfilling their core needs online spend in the next 6 months; 40+%
of familiarity and immediacy increase in online buyers4
PURCHASE
Post purchase advocacy will 1 in 2 consumers relied on Word of
POST
5 continue to be important; digital will Mouth for first online purchase in
be a powerful medium CPG pre-COVID; expected to be
fulfilled digitally5
1. [BCG COVID-19 Consumer Sentiment Survey, Question Text: “In In the next one how do you expect the choice of your brands to change?”; April 30-May 03 2020 ]; 2. 1. [Nielsen, Nielsen TV and Smartphone report, Week of March 30 vs Week of April 27]; 3. [BCG COVID-19
Turn the Tide
Consumer Sentiment Survey, Question Text: "How do you expect your spend to change in the next 6 months across the following areas?”; April 30-May 03 2020 ; 4. BCG COVID-19 Consumer Sentiment Survey, April 30-May 03 2020 ; 5. [CCI Survey and BCG analysis, Question Unlock the new normal
Text: "Can you tell us the reasons of what made you buy food & grocery online the first time?", N= 6000 transactions]Cosmetics
Home Care
Personal Care
In Summary:
CPG- Non-Food
Copyright © 2020 by Boston Consulting Group. All rights reserved.8 consumer trends will have a higher impact on the CPG (Non-Food) category
52% consumers have increased
REVERSAL OF PAST ACCELERATION OF NEW use of social media5; more
product discovery on social
TRENDS EXISTING TRENDS HABITS media e.g. beauty tips, hacks
1 4 6
Bringing the Accelerated adoption of e-
Remote way of living
Outside Inside commerce & O2O
7
Social 2.8x rise in time spent on
84% consumers who have purchased non
food related sub -categories online during 'D'o 'I't 'Y'ourself
Distancing self help and personal grooming videos1
the lockdown are willing to continue2
100% spike in online research of "how
2 to" trends6
Trust in brand
above all else 8
Health & Superior hygiene & clean
88% consumers are planning to stick to the living: a new norm
Hygiene choice of the same brand3
3 5 47% Indian household claim increased
Trading down & home/toilet cleaning7
Rise of 'Smart shopper'
bargain hunting 91% Indian households washing hands
more often7
Income 29-33% consumers are planning to trade
~1.3x rise expected in share of digitally
influenced urban consumers across non-
down3
Uncertainty food categories4
Home Care
Personal Care Wild cards: likely to be temporary surges in line High potential permanent shifts: linked to Stickiness of change is yet to be determined
Cosmetics with recovery period positive reinforcement
1. [Nielsen, Nielsen TV and Smartphone report, Week of March 30 vs Week of April 27]; 2. 2. [BCG COVID-19 Consumer Sentiment Survey, categories considered: Fresh Food, Packaged F&, Makeup, Staples, Personal Care, Home Care & Baby Care, Question text: “ In the next 6 months, how do you expect your online spend for the following types of products to change?”, April
30-May 03 2020 ; 3. [BCG COVID-19 Consumer Sentiment Survey, Question Text: "In the next one month (CPG) how do you expect the choice of your brands to change?”; April 30-May 03 2020; 4 Estimation for 2021, Expert Interview, BCG CCI Digital Influence Study 2017 analysis (N=18,000 per year) 5. . [BCG COVID-19 Consumer Sentiment Survey, Question Text: " Which
statement best describes your usage behavior across the following areas?", April 30-May 03 2020; 6. [Online Search Trends (India), 2nd week of Feb to 4th week of April]; 7. . [Kantar, COVID-19 Barometer India Research Webinar, 3rd April]CONSUMER BEHAVIOR CHANGES IN CPG (NON-FOOD) PATH TO PURCHASE
Consumers will trade up in home care, trade down in cosmetics, and 24-29% consumers planning to trade up in homecare and personal
1 selectively trade up /down in personal care owing to a more value care; while 29-33% are planning to trade down in cosmetics and
conscious, yet quality focused mindset personal care1
CONSIDERATION
DISCOVERY &
Surge in demand for specific products/variants with an increased focus 47% Indian households claim increased home/ toilet cleaning;
2 on health, hygiene, and wellness
91% Indian households washing hands more often2
3 Changes in basket with a more at-home, do-it-yourself lifestyle 2.8x increase in time spent on self help/personal care
videos3
Salience of digital influence to rise for home care, personal
4 care, and cosmetics; more consumers will increase online ~1.3x rise expected in share of digitally influenced urban
research across these categories consumers across non-food categories4
PURCHASE PURCHASE
Consumers will look for buying avenues which 45+% consumers planning to increase
5 provide contact-less convenience while fulfilling online spend in the next 6 months; 30+%
their core needs of familiarity and immediacy increase in online buyers5
1 in 2 consumers relied on Word of Mouth
POST
Post purchase advocacy will continue to be
6 important; digital will be a powerful medium for first online purchase in CPG pre-COVID;
expected to be fulfilled digitally6
1. [BCG COVID-19 Consumer Sentiment Survey, Question Text: “In In the next one how do you expect the choice of your brands to change?”; April 30-May 03 2020; 2. [Kantar, COVID-19 Barometer India Research Webinar, 3rd April],; 3.[Nielsen, Nielsen TV and Smartphone
Turn the Tide
report, Week of March 30 vs Week of April 27] ; 4. Estimation for 2021, Expert Interview, BCG CCI Digital Influence Study 2017 analysis (N=18,000 per year); 5. BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020 ; 6. . [BCG COVID-19 Consumer Sentiment Survey, Unlock the new normal
Question Text: " Which statement best describes your usage behavior across the following areas?", April 30-May 03 2020THE NEW NORMAL FOR
E-COMMERCE WILL SEE
NEW PATHWAYS
ACROSS CATEGORIES
Copyright © 2020 by Boston Consulting Group. All rights reserved.
WHAT WILL IT TAKE
FOR YOU TO WIN?
Turn the Tide
Unlock the new normalThe new pathway is changing and filled with opportunities
Portfolio & Messaging Value Focus Presence & Influence
PURCHASE
STRENGTHEN BRAND
PRE-
Digital proliferation and more functional, value POSITIONING
Increase "top-of-the-
seeking choice drivers funnel" branding to TAP THE
enhance brand equity HERE & NOW
OPPORTUNITY:
Scale up affordability
ADJUST TO THE NEW
initiatives and re-
NORMAL OF
appropriate
Channel & Engagement ENGAGEMENT:
promotional spends
PURCHASE
Significantly re-
to aid rebound
design digital
Fulfilling core needs of assistance, experience, engagement with
instant gratification and trust in a contact-less way CAPTURE THE your consumers
EXPANDING leveraging social
ONLINE WALLET: Tap media, influencers
into increasing pool and loyalty programs
of online buyers and
leverage emerging E-
commerce models to
PURCHASE
provide frictionless
experience
POST
Growing importance of brand advocacy and
personal touch
Turn the Tide
Unlock the new normalDigital proliferation & choice drivers present opportunities
Superior
Bringing the Strive for
Embracing digital Trust in brand Shopping hygiene & clean Trading down and
outside health &
services and experiences above all else for utility living: a new Bargain Hunting
inside wellness
norm
Scale-up partnerships for exclusive E-commerce launches Assurance for health and Strengthen
1 hygiene affordability initiatives
Scale up partnerships for exclusive e- 5 7
commerce launches, including in
traditionally offline heavy categories Adopt and highlight
hygienic and
contact-less
PRE-PURCHASE FUNNEL
initiatives across the
Leverage social media for "top-of-the-funnel" branding value chain Scale-up partnerships
2 with Fintechs and banks to
provide affordable
Targeted campaigns to build brand equity (esp. for
new online users) payment options (EMIs
etc)
Ramp up personalization and re-marketing capabilities Review promotional spends to aid rebound
3 6
Focus on first party data capture to efficiently target and re-target
• Re-appropriate discounts and promotions
consumers with tailored nudges and offers
among essentials (reduce spends) and
discretionary categories (increase spends)
Localize offerings for changing demographics • Advance select sale events to revive
consumer sentiment
4 • Accelerate creation of vernacular platforms to cater
to new users in tier 2/3 cities
• Localize static ads with dynamic language
optimization
Turn the Tide
Unlock the new normal
Medium Term Short TermFulfilling core needs of assistance, experience, instant gratification and trust in a
contact-less way
Accelerated adoption of E- Embracing digital services and
Remote way of living DIY – Do It Yourself
commerce and O2O experiences
Remove barriers to online sales to improve sales conversion
8
• Product experience / touch / feel / fit: Digital enablers like AR/VR, livestreaming, 3D Videos, detailed catalogues etc.
• Assistance: Leverage conversational commerce, virtual query resolution, chatbots etc. (especially for new users)
•
PURCHASE FUNNEL
Immediate gratification: Leverage O2O to develop hyperlocal capabilities with reduced delivery times
• Trust in product / seller: Ensure and highlight high quality standards of vendors (especially for SMBs)
• Shopping as a social event: Digital enablers for group purchase
Strengthen offline-online supply chain to meet spikes in consumers demand post lockdown
9
• Scale up O2O partnerships to offset supply chain challenges and provide more seamless journeys to customers
Turn the Tide
Unlock the new normal
Medium Term Short TermBuild brand advocacy via personal connect
Embracing digital services
Rise of “Smart Shopper”
and experiences
Drive Value by repeat purchase
10
POST- PURCHASE FUNNEL
• Incentivize repeat purchases with loyalty program
• Incentivize social peer recommendation: online product reviews, ratings
Turn the Tide
Unlock the new normal
Medium Term Short TermBrand Showcase (1/4)
Pre-purchase
Scale up partnerships for exclusive E-commerce launches
Flipkart Amazon
Range of Realme products OnePlus8 sales launch via Amazon
including Realme smartphone and OnePlus website with
Narzo 10A, Realme Watch and TV attractive offers
launched via Flipkart and Realme Pre-launch buzz created with
Website product previews2
Curated offers included like Zero- Xiaomi Mi 10 launched on Amazon
cost EMI options1 and Xiaomi website3
Dabur launched Hand sanitizer range and Immunity Booster Tulsi Drops exclusively on Amazon
and Flipkart to meet immediate surge in demand during lockdown4
Turn the Tide
Source: Press Search and BCG Analysis; 1. [NDTV] [Realme Narzo 10A Goes on Sale Today at 12 Noon via Flipkart, Realme Website: Price and Specifications]; 2. [NDTV] [OnePlus 8 Pro to Go on Sale Today at 12 Noon via Amazon, OnePlus Site: Price in Unlock the new normal
India, Specifications]; 3. [NDTV] [Mi 10 Goes on Sale in India via Amazon, Mi Store: Price in India, Offers, Specifications]; 4. [Economic Times] [BE Exclusive: Dabur launches Tulsi Drops after hand sanitizer]Brand Showcase (2/4)
Pre-purchase
Leverage Social Media for
Unlock influencer partnerships
“top-of-the-funnel” campaigns
Myntra1
Launched Myntra Studio to provide users with
Launched thought leadership campaign access to "original, exclusive, inspirational,
using Facebook Live to help new parents entertaining and shoppable content at scale"
through live online sessions with leading This aims to transform Myntra from a shopping
pediatricians during COVID-19 as part of app to a “habit-app”
the ‘World Immunization Week’2
296K 1.4Mn Collaborated with 350 fashion
Total video views Reach influencers & celebrities to create
content on look books, styling &
82K 3 product recommendation on own
website and social media
Highest video views Languages (English,
for 1 live Hindi and Bangla) 1000 pieces of celebrity led content
Turn the Tide
Unlock the new normal
Source: Press Search, Social Media Search and BCG Analysis; 1 [Economic Times] [Myntra launches original fashion content to drive customer engagement amid the lockdown]; 2. Facebook Case StudiesBrand Showcase (3/4)
Pre-purchase
Rationalize assortment and SKU-mix to reflect changed needs and preferences of consumers
Flipkart Myntra
Closely working with apparel brands to Showcasing range of work-from-home attire
ensure higher availability of face masks where curated styles (including specific ones
for conference calls) are available with focus
Flipkart SmartBuy also launched hand on “comfort, while at work”
sanitizers and surgical masks in April, to Myntra partnered with Wildcraft to sell
fight the shortage protective face masks
Amazon1 Nykaa
The Fashion and beauty E-commerce platform
Amazon has now expanded its Pantry service has ventured into the delivery of essential
to 128 cities delivering pulses, packaged products—bathing essentials, oral care
food and cleaning products products, home needs, face masks, intimate
hygiene essentials, moisturizers etc.
Leading E-com players are pushing larger packs to increase the basket size with price laddering (Up to 20% increase in average basket size)
Turn the Tide
Unlock the new normal
Source: Press Search, Social Media Search and BCG Analysis; 1 [Economic Times] [Covid-19 impact: Curbs on e-commerce upset Amazon’s cart in India]Brand Showcase (4/4)
Purchase
Strengthen online-offline network to meet spike in consumer demand post lockdown and to
provide consumers a seamless experience
Flipkart1
Flipkart has partnered with Tata
Consumer Products for essentials
in an offline-online model Mondelez India under their brand
‘Cadbury Joy Deliveries’ enabled joyful
moments with indulgent snacks
Distributors of the Tata group companies will list themselves on Flipkart delivered to shopper’s doorstep while
as marketplace sellers for essential products such as beverages (Tata Tea they are in the lockdown2
and Coffee) and foods (Tata Sampann spices, pulses, and nutria-mixes)
Flipkart has partnered with Spencer’s Retail
400+
Purchases via conversion ads ran
for hyperlocal delivery of groceries and
under 'Household Snacks' campaign
essentials on Facebook & Instagram
(Apri’20 –May’20 )
Turn the Tide
Unlock the new normal
Source: Press Search, Social Media Search and BCG Analysis; 1 [Business Standard] [Covid-19: Flipkart ties up with Tata Consumer to provide essentials] [LiveMint] [Flipkart, Spencer's to pilot hyperlocal grocery delivery]; 2. Facebook Case StudiesDEEP DIVES
THESE
CONSUMER
BEHAVIOR CONSUMER
TRENDS HAVE
MOBILE APPAREL PACKAGED
VARIED IMPACT
ACROSS GOODS
CATEGORIES
TOP 3 CATEGORIES – ACCOUNTING FOR 65% OF GMV IN INDIA (2019)
Turn the Tide
Unlock the new normalDeep-dive: Mobile
Unlock the new normal
Turn the Tide
Copyright © 2020 by Boston Consulting Group. All rights reserved.Consumer Behavior Change in P2P: Pre-Purchase
DISCOVERY
1 With higher value consciousness, functional triggers to 3 Salience of digital influence for mobile will rise even more
become more important
% mobile consumers with pure replacement as purchase trigger1 to go up by 5-
10%2 …
~70%2 urban consumers for mobiles expected to be digitally
influenced
e.g., "Screen is not clear"
60% 65-70% e.g., "Phone is slow" Pre-COVID, 55-60%4 urban mobile consumers were digitally influenced (used
online to discover or research or compare products)
Pre-COVID Post-COVID
..while Shopping for non-functional triggers1 likely to reduce
55-60% 70%
e.g., "Bored with phone"
40% 30-35% e.g., "I Like the new model"
Pre-COVID Post-COVID
Pre-COVID Post-COVID
2 Higher average replacement time in near-medium term
2.4 Yrs3 8-10%2 increase in near-medium term +8-10%
for mobile phones
Pre-COVID Post-COVID
Acceleration of EMBRACING DIGITAL
Reversal of past trends, SHOPPING
existing trends, likely SERVICES &
likely to be temporary FOR UTILITY to last longer term EXPERIENCES
Turn the Tide
Unlock the new normal
1. [Q: Best description of the need for purchase of your current mobile; Source: CCI Survey and BCG analysis, N=840] 2. [Expert interview and BCG analysis] 3. [Q. “Frequency of purchasing mobiles over last 5 years” Source: CCI Survey and BCG
analysis, N=840] 4. [BCG CCI Digital influence Study 2017 , N=18,000, BCG CCI Mobile consumer study, N=2000 and BCG analysis] ; Data for urban consumers shownConsumer Behavior Change in P2P: Pre-Purchase
DISCOVERY CONSIDERATION
4 With social distancing, importance of online research to 5 With a value seeking mindset, importance of pricing as a
increase choice driver to go up
Likely to • Both salience and maturity of online 25% Salience of price-conscious consumers may increase
55% increase research to increase
% respondents with "Price" in top 3 choice driver for mobiles (pre-COVID)2
• More price, feature, performance
% smartphone users using comparisons expected
online research (pre-COVID)1
Consumers may trade down in their choice of purchase/look for
offers and deals
Likely to
53%
decrease 59% 40%
• Retailer influence may go down as
% smartphone users using consumers look for more contact-
less shopping Of those looking to increase Of those looking to decrease
retailer recommendations spends on mobiles are looking spends on mobiles will buy
(pre-COVID)1 for deals3 cheaper variant4
% respondents (post-COVID)
Acceleration of Reversal of past TRADING DOWN
RISE OF 'SMART
existing trends, likely trends, likely to be AND BARGAIN
to last longer term
SHOPPER'
temporary HUNTING
1.. [Percentage of Smartphone users; Source BCG CCI Mobile consumer study and BCG analysis, N=2000] 2. [Considering average of Rank 1-3 responses. Q: “Thinking about your most recently purchased mobile phone, can you tell me the 3 most important Turn the Tide
factors which helped decide what product should be bought?" Source: BCG CCI Survey and BCG analysis, N=840] 3. [Q. “Please state the reason to spend more/ less in near future?” (for those increasing expenses) Source: BCG COVID-19 Consumer Sentiment Unlock the new normal
Survey April 30-May 03 2020, N=1,327] 4. [Q. “In the next 6 months, how do you expect the choice of your brand to change” (for those decreasing expenses) Source: BCG COVID-19 Consumer Sentiment Survey March 23-26, N=2106]; Data shown for urban
consumersConsumer Behavior Change in P2P: Pre-Purchase
CONSIDERATION
6 With changing use cases, consumers will be more feature conscious 8 Uncertainties due to pandemic may lead to some consumers
experimenting less
23% Salience of feature-conscious consumers may increase 58% Traditionally, mobile consumers have not been brand loyal
% respondents with "Features" in top 3 choice driver for mobiles (pre-COVID)1 % pre-COVID Consumers who switched brands3
7 Certain features may become more important Post-COVID, 70% Consumers with a positive spending outlook for mobiles
Post-COVID increase is screen-time2 spent on likely to stick with brand choice already in mind4
Video Streaming 16% 70%
Video Conferencing 485% % respondents (post-COVID)
Leading to need for higher video stability, security etc.
New habit, stickiness Reversal of past
REMOTE WAY OF LIVING TRUST IN BRAND
unclear trends, likely to be
temporary ABOVE ALL ELSE
Turn the Tide
1. [Considering average of Rank 1-3 responses. Q: “Thinking about your most recently purchased mobile phone, can you tell me the 3 most important factors which helped decide what product should be bought?" Source: CCI Survey , N=840] 2. [BARC Nielsen – TV + Unlock the new normal
Smartphone consumption report during COVID, 7th May 2020] 3. [Q: "Which brands do your current and previous phones belong to?" Source: CCI Survey & BCG analysis , N=840] 4. [Q. “In the next 6 months, how do you expect the choice of your brand to change"
(for those increasing expenses); Source: BCG COVID-19 Consumer Sentiment Survey March 23-26, N=2106 ] ; Data shown for urban consumersConsumer Behavior Change in P2P: Purchase and Post-Purchase
PURCHASE POST-PURCHASE
9 Affinity for online will accelerate even more 10 Consumers will expect positives of offline 11 Higher need for at-home or virtual post sales
along with safety and convenience of service
Online share for mobile phones (in value terms) likely
to reach 45% in the next 2 years1 from pre-COVID contact-less purchase
38%2 Traditionally, 3 key barriers to online purchase of
mobiles4 - must be addressed for digital conversion
38% 45%
Lack of product experience before
1
Pre-COVID Post-COVID buying
55% consumers intend to increase online spends on
mobile in the next 6 months3 With social distancing, mobile consumers will want to
Lack of opportunity to leverage salesperson limit store visits for after-sales service
2
knowledge
55%
% respondents 3 No personal relationship
(Post-COVID)
Acceleration of existing ACCELERATED Reversal of past
trends, likely to last BRINGING THE
ADOPTION OF E- trends, likely to be
longer term temporary OUTSIDE INSIDE
COMMERCE AND O2O
Turn the Tide
Unlock the new normal
1. [Expert interview and BCG analysis ] 2. [IDC India Mobile Phone Tracker ; % by value] 3. [Q. “In the next 6 months, how do you expect your online spend for the following types of products to change?” Source: BCG COVID-19 Consumer Sentiment Survey April 30-May 03
2020, N=1,327] 4. [Q: "List of statements read out for 4 channels and asked to choose which channels are applicable to each of the statement"; Source: CCI Survey, N=840] ; Data shown for urban consumersYou can also read
