Indian consumers tighten their belts to cope with rising prices
January 16, 2014 Leave a comment
January 14, 2014 4:56 am
Indian consumers tighten their belts to cope with rising prices
By Amy Kazmin in New Delhi
At Shri Ambico Medicos, a tiny family-owned pharmacy in New Delhi’s Khanna Market, India’s economic malaise is reflected in declining sales of men’s deodorant and facial creams.Global fast-moving consumer goods companies such as Unilever and L’Oréal, and their Indian rivals Enami and Paras, have been aggressively promoting men’s personal grooming products – including deodorant and even men’s fairness creams – for the last three years. They have effectively created a market where none existed.
But even among their users, male grooming products are still seen as optional rather than indispensable purchases. Manish Nagpal, the owner of Shri Ambico Medicos, says sales of these items have been hardest hit by consumers looking for ways to tighten their belts to cope with slower economic growth and rising prices.
“They are forgetting [about] deodorant,” Mr Nagpal says. “If they used to buy one a month, now they buy one every two or three months.”
Consumers are looking for ways to cut costs in the face of spiralling prices. Consumer prices in India rose 11.16 per cent in November year-on-year, the fastest in Asia, moderating slightly to a 9.87 per cent annual pace in December.
At the next-door Bansi Flour Mill, which sells Indian staples such as rice, dal and oil, owner Saurav Luthra says his customers are trading down in terms of quality to save money, and have stopped buying treats such as dried fruits and nuts.
“Luxury products have been abandoned,” he says. “People are just focusing on what they need.”
As always, high inflation is taking its greatest toll on the poor, who spend the largest proportion of their monthly budgets on food and other household necessities.
Ramvati, 42, a widow with a young child, runs a small dry goods shop in the town of Dadri just outside New Delhi and says many of her customers are cutting back on the quantities of what they buy, especially items like tiny sachets of shampoo that sell for just a few rupees each.
“Because of higher rates, people are reducing their purchasing,” she says. “Earlier, they used to buy 10 or 20 sachets of shampoo. Now they take just four or five.”
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