MUMBAI, Jan 31 (Reuters) - Indians are cutting down on
discretionary purchases like apparel, electronics and
automobiles as consumer optimism in the country is on a decline,
according to an emerging markets consumer survey report by
High inflation and slower growth continues to worry Indian
consumers with more people expecting lower salary increases,
said the survey, which interviewed 2,602 respondents across 10
cities and rural areas in India.
This is in sharp contrast with other fast-growing economies
like Indonesia, where the increase in minimum wages is likely to
keep consumer sentiment robust, and in China, where sentiment
remains strong on the back of purchases by consumers from lower
income groups, the report released on Wednesday said.
"There are signs of down trading in discretionary items in
India. Fewer people are buying smartphones and more now want to
buy an entry-level car," said Arnab Mitra, research analyst with
"More and more consumers are postponing big-ticket
purchases.. This situation will take more than a couple of
quarters to improve," he said.
Last week, investors knocked down shares of India's largest
consumer company Hindustan Unilever by 5 percent after
the it reported weak volume growth as consumers cut purchases of
products such as packaged foods and personal care items.
The report, however, said the long-term growth potential in
India remained intact due to low product penetration in most
(Reporting by Nandita Bose; Editing by Sunil Nair)