As more people come out of quarantine, there could be a spree of “revenge spending” at least among those who can splurge but could not because of lockdown. Revenge spending refers to an overindulgence in retail therapy by consumers who have missed shopping at their favourite outlets due to the lockdown. Long queues, fuelled by revenge spending sprees, have been seen outside outlets of brands such as Apple, Nike, Gucci, Estée Lauder and Lancôme, among others, in Chinese cities.
Could we witness such behaviour in India? There is no way to know.
Nikhil Prasad Ojha, partner, Bain & Company, sees two distinct consumer trends playing out — consumption among low-income groups dropping after lockdown while high-income households remain unaffected. “There will be a flight to value — shifting to cheaper alternatives (among mass market consumers) and simultaneously an uptick in premium segments given the sustained ability of high income households to spend,” he adds.
Luxury might be a necessity for a few, but most shoppers will stick to what they need to buy and hold the urge to splurge for more predictable times.
Nitin Jain, MD of Alvarez & Marsal (India), says, “India and China consumers are not an apples-to-apples comparison. New purchases in India might get impacted.”
PwC’s partner & leader for retail & consumer Anurag Mathur sees a spree of “indulgence consumption” happening in India after the lockdown is lifted.