The strains on our lifestyles imposed by the effects of the Coronavirus (COVID-19) call for new ways of spending and more responsible consumer behavior in order to survive moving forward.
COVID-19 has changed nearly every aspect of our daily lives, and consumer spending is no exception.
A Global Consumer Spending study called “Future Consumer Index” done by EY, a leader in assurance, transaction and advisory services suggests that over time, most consumers in the “Save and stockpile” segment will migrate to two new segments: “Remain frugal” and “Cautiously extravagant.”
These new consumer segments, detailed in the Index, could emerge post-COVID-19 and be summarized as: “Keep cutting” (13.1%), “Stay frugal” (21.7%), “Get to normal” (31.4%), “Cautiously extravagant” (24.7%) and “Back with a bang” (9.1%).
The World Economic Forum also attests that COVID-19 pandemic has drastically altered how and where consumers choose to spend their hard-earned cash. The economic experts note that as consumers grapple with uncertainty, their buying behavior becomes more erratic. Global studies show that we have reduced spending on all non-essential products and services.
Eswatini consumers are no exception especially due to the profile of the consumers. The Eswatini Economic Policy Analysis and Research Centre (ESEPARC) notes that the country is largely a consuming economy with private consumption at E45.037 billion in 2016/17, which is 20% shy of the country’s GDP (E56.518 billion). The country is a net importer of goods and services spending as much as E25.943 billion on imports and earning E25.351 billion from exports.
Consumers Association Chairman Bongani ‘Bhanyaza’ Mdluli says the new normal means adapting to new ways of spending and to try and save where possible. He says post COVID-19, a new culture of spending needs to be adopted by everyone. He made an example of birthdays, saying throwing a costly birthday party is no longer prudent but rather the day can be observed in a different way like just buying a birthday cake.
“Consumers resources have been greatly depleted hence the need to be more responsible. Consumers should guard against unnecessary borrowing and we can hope they will be protected by the Money Lending Act, which states that borrowers should not be over-burdened,” he says.
Mdluli says consumers should guard against spending money that they do not have during this difficult period and prioritise their needs over their wants.
Emerging consumer segments;