Vox Populi and Covid

This article quantifies the behavioral aspects of the Indian consumer during the times of covid and just when it was starting (January to current). To do this, data has been taken from Google trends – the search data of each term and the article tries to gauge the sentiment or the behavior or tries to dive deep into the mind of the consumer. Yes, the caveat remains – a mere search doesn’t mean actual buy/sell but it does indicate intent or the thoughts of the consumer.

Key takeaways-

1. Intention to create emergency fund/save and upskill through online courses prime importance
2. Wedding, eating out, vacation and personal loan has taken a backseat
3. Positive relationship between covid search and divorce search in Google

10 search terms were selected arbitrarily to capture the buying and saving + social aspects of the consumer keeping the current time in mind (Table 1). Buying a new bike seems to be a luxury or splurge during normal times, but it seems as necessity now since social distancing becomes new normal. Similarly, online courses to upskill have both +ve and -ve classification as one can normally upskill as well as can upskill if negativity on his/her job is on the hindsight.

Basic correlation of the no of times the items searched vs covid states that there’s high positive correlation of online courses and emergency fund while vacation, wedding, bike and restaurants have a very high negative correlation. Among the negatively correlated items, except bike, all items fall under splurge category as per Table 1 above. As covid searches went up, people lowered their propensity to consume restaurants, shelved plan of wedding & vacation as lower Google searches suggest.

On the other spectrum, analysis suggests that with 10% increase in the search for covid, search for online courses and save money increased by 12% and 5% respectively. This indicates, people are more focused on upskilling themselves as the employment scenario faces impending disaster and save money (may be the techniques or avenues to save) too for rainy days. Focus on these two items have recalibrated consumption and savings preferences of an Indian consumer at a large scale. Chart 4 gives an idea how all the search items are related with one another.

In the chart above, one can see that there’s a massive negative correlation between emergency fund, covid and online courses vs wedding, restaurants, vacation, new bike and personal loan. This relocation of funds from splurge to emergency funds and online courses has one link – covid. Without covid, could we have seen this allocation?

As an end note, it will be worthy to remember once more that, this analysis comes with an obvious caveat that these are search terms only and there’s a massive difference between a search and actual buy/sell. But, what it does show is consumer’s intent and throws light on the thought process. Whether there will be materialistic change in people’s stance regarding their personal finance, time will tell but the intent to explore the necessary is commendable. Indian economy is standing on the pillars of consumer spending – once the savings side is ensured, the authorities have to take measures that helps the consumers to regain confidence and spend towards discretionary items.

Remember, we are in crisis when discretionary items are NOT in demand but the necessities are.