Coronavirus can change consumption habits, potentially irreversibly. Here’s a personal example, since the lockdown started, I’ve been cooking at home. Mostly vegetarian items, but my understanding of the science of food has vastly improved, and I’ve seen the health benefits of eating in too. Not to mention the monetary savings. This, by the way, has nothing to do with working from home. All that this change of food habit needed was a disruption, and it arrived in the form of the quarantine. Now, even though the cloud kitchen startups have started operating again, I find asking myself, should I spend Rs.200 on a single meal, or should I cook three meals at the same cost? No matter how lazy you are, if you don’t have money to splurge, the choice will be obvious. Going forward, I very much plan to start packing my lunch from home once I return to the office.
I’m confident that I’m not the only one to be thinking this way, and this behavioral shift will echo in other consumptions too, starting with the ready food and beverages space. Now, in such circumstances, discounts on purchases have traditionally helped, but that’s not something businesses will be able to offer in a post-COVID19 economy, not up to the consumers’ expectations at least. So all doom and gloom from here on? Not at all! While consumers will be more cautious about their spending habits, after all, people are losing income when not their jobs amid the pandemic, but they will continue spending. Maybe that dishwasher, or a bigger fridge. Later on perhaps a vacation, even a vehicle upgrade. Folks from digital gaming and entertainment, e-learning, health-tech spaces, among others, are already gaining new paid customers. Even e-commerce is cracking into traditional bases.
COVID-19 has infected more than 2.6 million people and killed more than 180,000 in over 180 countries between the start of December 2019 and the third week of April 2020. With a cure at least 12-18 months away, countries around the world will need to keep some form of restriction in place in the coming months to check further spread of the disease. This will add to the economic cost of the pandemic which has long surpassed $1 trillion just for the year 2020. Beyond rescuing falling consumption with income support for the unemployed, economies will need to make sure they don’t lose their manufacturing capabilities and export markets. Ascertaining consumption growth in a post-Coronavirus economy will also call for support for the BFSI sector to ensure credit availability as well as investment in innovations and skills for the future. And all of this will have to follow investments in healthcare.
What started as a disturbance to the China-led supply chain ecosystem, followed by a drop in demand in the rapidly-growing Asian economies, the impact of Coronavirus has now spread the world over, crippling even the largest economies. As partial restrictions continue over the coming months, so will high unemployment rates, and consumption will remain weak. In such a brave new world, the way forward for everyone will be led by innovation, new ideas to redefine consumption habits, and in turn trade, and investment activities for the coming decades. And I’m eagerly waiting to see what entrepreneurs and investors come up with next. How experience is further mixed into spending activities. Just when we were thinking what’s next with the rapid progress in technology and diminishing human contributions due to automation, here we are, back at the start!