Consumer in India evolving in COVID-19

The coronavirus Pandemic has not only affected big industries, sectors, and economies but also people’s life choices. Being an Indian consumer, there are many changes one might face in their consumption of goods and services’ pattern. Indian consumers are adapting rapidly during COVID-19 and there are certain parts of this adaption that might be permanent post-COVID-19. The article talks about how the consumer in India has evolved, is evolving, and will evolve and how along with him consumer laws to evolve.

Introduction

            An Indian Consumer plays a more crucial role in the world economy as India is one of the biggest markets of the World. The whole business and marketing industry plan all their new products while keeping the consumer in mind; a product the consumer would buy. As time progresses, a consumer evolves with his buying behavior and his preferences get change. For example, a mobile phone in India was a luxury 20 years ago but today it has become a necessity for a consumer. When one is observing the evolution of a consumer in India, it is necessary to observe during contemporary times. It must also be noted that with the consumer, the laws protecting the consumer also evolve.

 The COVID-19 pandemic has affected each and everyone’s life all around the world. So, how is the behavior of a consumer in India changing during COVID-19? How Indian consumers have evolved during the pandemic? How the Laws regarding the Consumer’s protection are simultaneously getting evolved, along with the consumer? Let’s look at it in detail.

Consumer Pre – COVID-19 Period

The behavior of Consumers before COVID-19

            Indian Consumers are the spotlight of the world as India is a huge market in the world with diverse consumers. There some defining trends that shape the behavior of an Indian Consumer[1]. The research firm, Kantar had identified some 10 key trends that could directly impact the consumers in 2020. This was a survey taken apparently before the coronavirus took over the world. Let us discuss some of the very important factors. Not wanting to deal with waste – Under this, the finding says that, when compared to the world average which is 15%, Indian consumers prefer eco-friendly products more with 53% of the Indian consumers willing to pay a higher amount for products that don’t affect the environment. The article further states that the consumers are willing to wait for deals, but not willing to wait for the sale of their goods. Another key aspect of this research is that Indian consumers are willing to take a risk. The article says that “Uncertainty in the social and economic environment has propelled Indian consumers to embrace new opportunities and create alternative futures for themselves.”

            Now let’s look at some statistics given by Deloitte. The research done by Deloitte[2] shows that the retail industry of India would mainly depend on the macro-economic factors in the coming years. The statistics say that the number of online shoppers would increase from 15% of internet users (online population) from the year 2017 to 50% in 2021.

            The report also talks about some of the characters of new-age consumers. They are said to be:

  • Convenience would be preferred
  • More internet users and online purchasers’ entry to the market
  • Technologically empowered and connected consumers
  • Healthy and eco–friendly choices suitable for the sedentary lifestyle
  • Shopping experience would become the key differentiator

From all these surveys and reports, one can understand that the e-commerce industry was reported to grow rapidly in India. But with new technology and advancements come new kinds of problems too. To regulate all this, new laws and policies must be brought in. This was done at the right moment by the government in 2019.

Introducing the new Consumer Protection Act, 2019

            Protecting consumers was seen as one of the important issues in India. Since there was no legislation governing consumer laws, the parliament in 1986 brought in the Consumer Protection Act, 1986. It’ major objective was redressal to consumer complaints and queries. But with rapidly evolving India, where technological advancements penetrate goods and services provided, the consumer laws must also be updated along with the advancements. Therefore, instead of bringing an amendment to the existing Act, the parliament passed new legislation called, Consumer Protection Act, 2019. The Act was published in the official gazette on August 9, 2019, and came into force on 20th and 24th, July 2020.

            One of the key aspects of the Consumer Protection Act, 2019 is that it includes e-commerce markets and online consumers in its purview. In the explanation (b) given under the section of section 2(7) of the Act, which defines the term consumer, it said that,

                        “(b) the expressions “buy any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing[3]

            Other highlights[4] of the Act are:

  • Pecuniary jurisdiction has been enhanced

The pecuniary limits of the district forum, the High Commission, and the National Commission have been increased. The new limits are Rs. 1 crore in the District forums, Rs. 1 Crore to Rs. 10 Crores in the State commission, and above Rs. 10 Crores in the National Commission.

  • Complaints can now be filed online

Now consumers can file complaints not only at the place of purchase or where the seller has its registered office address, but also where the consumer himself resides or works according to 34(2)(d) of the Act. But one of the biggest perks of the Act is that e-complaints can now be files according to Section 35 (1) and proceedings in video conferencing under Section 38(6).

  • Central Consumer Protection Authority has been established and other areas

Under Chapter III of the Act, A Central Consumer Protection Authority has been established. This authority, according to the Act is “to regulate matters relating to the violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.”[5]

Other areas are the introduction of new concepts such as product liability, Unfair Trade Practices, Penalties for misleading advertisements, and Alternate Dispute Redressal Provision[6].

Evolution of Consumer during COVID-19

Consumer Behavioural Pattern Change during COVID-19

            The COVID-19 pandemic had turned the world upside down in a time of few months. The pandemic had affected the biggest economies of the world and one of them is India. Change in the social situation and products available is one of the key factors for drastic changes in the behavior of Indian Consumers. In a document published by EY[7], it is seen that the consumer has started a digital journey altogether. The document indicates “five dimensions where there has been accelerated change:

  • Digital customer journey
  • Hyperlocal and online communities
  • Healthy living
  • Digital content consumption, and
  • Consumers and the State”[8]

The document says that during the Lockdown situation in India, New orders through Grofers have risen by 15-20%. It also says that in Big Basket, the basket value has risen by 15-20%. Another important observation is that there has been a rise in Voot and Amazon users and these tech-giants have improved their options and offers. The document also provides key action areas, like digital-only, Virtualised sales and service, re-baseline consumer insights, etc. These action areas talk about “building and strengthening E-commerce relationships” and “focus on risk mitigation and business continuity”.

Consumer Protection Act, 2019: Beneficial during the pandemic

            The Consumer Protection Act, 2019 can be said as being more beneficial during a pandemic. This is mainly because it covers e-commerce under its purview and proceedings are allowed through video-conferencing. The Coronavirus pandemic, during which there are many problems such as social distancing and transportation, virtual court proceedings, and e-complaint features are beneficial.

            Since online platforms and e-commerce gained more preference during the pandemic, the new Consumer Protection Act is seen to be very relevant and beneficial to any Indian Consumer.  Also, the video-conferencing court proceedings is a concept that must be encouraged and welcomed.

            There have been cases that took place during the pandemic which refer to this Act. For example, in Mrs. Usha Chaudhary vs M/S Supertech Ltd.[9], the case was returned to the respective district forum, as the pecuniary limit was not above Rs. 1 Crore. The case would have been heard at the State commission if it was the old Act, where the State Commission heard cases above Rs. 20 lakhs, and the amount here was above Rs. 20 Lakhs.

Post COVID-19: The Future Consumer

Expected Consumer Behaviour in the Future

            It has been observed from a Research report by Accenture that the current consumer pattern would likely be permanent. The report had said, “The India leg of the survey found that 90 percent of consumers are making lasting changes to how they live, work and shop, and there is no going back to the pre-pandemic world for consumer brands[10]

            The report also said that consumers are preferring to:

  • Reduce wastage
  • Buy more eco-friendly and healthy products
  • Start using e-commerce and digital services

Another important issue found in the report was that “30% of people plan to increase the amount they work from home in the future[11]. Therefore, a lot of e-commerce and digitalization can be expected in the future years to come.

Scope of Consumer Protection Act, 2019: Is it sufficient for the foreseeable future?

            The new Consumer Protection Act covers e-commerce which seems to be the next big thing in the future. Therefore, it can be said that this Act might be sufficient for the foreseeable future. One might not know what kind of new technologies might arise concerning consumers and their protection, but it is seen that, with certain amendments to the new Act, it might be very well sufficient to govern future consumer-related problems.

            However, while considering issues like Artificial Intelligence and its penetration in almost all industries and sectors, new legislation might be required to govern such new technological advancements.

Conclusion

            The Coronavirus pandemic has affected the consumer behavior pattern in India and Indian Consumers have evolved and adapted to the new normal. The main change that is seen and is predicted to become permanent is the increased use of e-commerce. There are pros and cons of digitalizing markets, but the contemporary world depends on technology. It is observed that growth in e-commerce that was predicted to be attained in a few years, has now almost been reached. Consumer laws are also evolving with changes in the social and economic environment and are expected to do so in the future too. Therefore, it is concluded that the COVID-19 has had an impact on the consumer, urging him/ her to move to e-commerce and digital platforms.

Frequently Asked Questions

1. What is the major impact on Consumer Behaviour due to the pandemic?

            Consumers are more conscious of the products they buy now. They prefer healthy and environmentally friendly products. Also, the online shopping rate has increased resulting in accelerating growth in e-commerce.

2. When was the new Consumer Protection Act passed?

            The Consumer Protection Act, 2019 was passed on August 6, 2019, in the parliament. The President attested to the legislation in 2019 and it was published on the official gazette on August 9, 2019.

3. Has the old Consumer Protection Act, 1986 been repealed and the new one came into force?

            Yes. The Consumer Protection Act, 1986 act was repealed and the Consumer Protection Act, 2019 came into force on 20th and 24th July 2020.

4. Would the changes in Consumer Behaviour due to the pandemic be permanent?

            It is predicted to be permanent as many consumers prefer the current consuming behavior.

5. Is e-commerce growth in India merit or demerit?

            It is most advantageous as many problems like transportation, time-consuming processes are not present and during the pandemic, it helps in remaining in isolation.

References


Leave a Reply

Your email address will not be published. Required fields are marked *