The Business Bytes
New Delhi, May 22, 2024 (TBB Bureau): Home Credit India (HCIN), a subsidiary of the global consumer finance leader, has released the second edition of its annual consumer survey, “The Great Indian Wallet Study: Consumer Behaviour Towards Key Financial Aspects.”
The comprehensive study was conducted across 17 cities, including Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad, Pune, Lucknow, Jaipur, Bhopal, Patna, Ranchi, Chandigarh, Dehradun, Ludhiana, and Kochi. It sampled approximately 2,500 individuals aged 18-55 years with an annual income between Rs. 2 lakh and Rs. 5 lakh.
Ashish Tiwari, Chief Marketing Officer at Home Credit India, commented on the findings: “The Great Indian Wallet Study serves as our compass, guiding us through the intricate landscape of consumer financial behavior each year. By delving into the underlying behavioral trends, we gain valuable insights into household financial stability and the potential risks associated with technology in financial transactions. This year’s study reflects an upswing in the overall Financial Well-Being among urban and semi-urban consumers due to strong economic growth, providing a clear insight into consumer sentiments, spending patterns, and saving habits among various demographics and segments.”
The Financial Well-Being Index among urban and semi-urban consumers has shown improvement compared to the previous year, indicating positive current status and future expectations. Notably, 52% of consumers reported an increase in their income over the past year, while 74% anticipate further income growth in the coming year. Additionally, approximately two-thirds of respondents expressed their intention to save and invest more in the upcoming year.
In terms of Personal Monthly Income and Expenses, the study found that the average income in 2024 has risen to Rs. 35,000 for Metros and Rs. 32,000 for Tier 1 and 2 cities, marking an increase from the previous year. Bangalore and Hyderabad emerged as the leading cities with incomes substantially higher than the national average. The study also highlighted that the average personal monthly income for lower-middle-class individuals stands at around Rs. 33,000, with monthly expenses around Rs. 19,000.
Regarding Wallet Share and Discretionary Spending, the study revealed that primary expenses such as Grocery and Rent continue to dominate the wallet share of the average lower-middle-class Indian. However, there are distinct spending patterns across different demographics and cities. For instance, Chennai leads in local travel/sightseeing, eating out, and watching movies outside, while Lucknow spends the least on these activities.
Household Expenses and Savings were also analyzed in the study, with findings indicating that an average increase of 6% was observed in household expenses. Moreover, around 60% of consumers prioritize building cash reserves for emergency expenses. Interestingly, men tend to outpace women in savings, and Gen Z demonstrates a stronger inclination towards savings compared to Millennials and Gen X.
The study also shed light on Financial Fraud and Data Security concerns, revealing that 21% of consumers reported being victims of financial fraud, with higher incidents in certain cities. Additionally, a notable percentage of consumers store financial data on their smartphones and share such sensitive data with friends and family, indicating a complacent approach to data security.
Lastly, Digital Transactions and UPI Usage were explored in the study, with 72% of consumers being current users of UPI. The highest usage was observed in Chennai, while the lowest was in Ahmedabad. Moreover, there is a growing interest, particularly among men, Gen Z, and Tier 1 residents, towards using Credit on UPI due to various benefits such as faster loan processes, ease of retail payments, better offers, and lower charges.
