CRED, a transparent and fully digital platform of highly trusted individuals, brands and institutions, conducted a study on the credit card spends of its members across Delhi, Mumbai and Bangalore.

This was done to understand larger trends reflected in spending behavior of affluent consumers pre-, during and post the lockdown. Spending was analyzed from April-May 2020 (when the lockdown was in full force) to June-July 2020 (the onset of unlock one and two), and these were then compared to pre-lockdown spends (Feb-March 2020) to provide a picture of how consumer behavior changed.

There were two top-line insights gathered from the study. Firstly, it was noticed that health and safety concerns drove purchase decisions even during the unlock period as was previously observed during the lockdown.

Rising spends on categories like insurance, fuel and digital wallets indicated that individuals chose to prioritize their health and safety.

The second insight indicated a shift to digital with affluent consumers continuing to make discretionary and non-discretionary spends online, despite the relaxation in restrictions during the unlock period. In fact, spends that have moved online, have surpassed pre-COVID spending levels.

Some of the key findings from the data collected are:

Insight One – Health and safety concerns continue driving purchase decisions post-lockdown

  1. Insurance spends remain high: Insurance spends during the onset of the lockdown were close to pre-COVID spends. However, during the May-June period, spending spiked across all three cities and surpassed pre-COVID levels. These stabilized but remained high during the unlock period. Mumbai topped with consistently high expenditures on insurance across time periods.
  2. Self-drive preferred option: Consumers chose to ditch cabs and self-drive. This is reflected by the negligible spends across cities on cabs but rather healthy spends on fuel both during and post the lockdown. Delhi residents topped fuel spending, even surpassing pre-COVID spends.
  3. Contactless payments drive gradual growth in wallet spends: Credit card spends on wallet top-ups were relatively high during and post the lockdown across all three cities indicating a preference for contactless payments.
  4. Low to no eating out and ordering in: Reluctance to dine out and order in led to significant erosion in spends on both categories during the lockdown and these have not picked up post-lockdown, especially compared to pre-COVID levels. Bangalore managed to top spending in both categories during and post-lockdown, indicating higher levels of trust in the city for outside food.

Insight Two: The forced shift to digital has become a larger behavioural trend

  1. Shift to digital observed for both discretionary and non-discretionary spends: More individuals opted to shop online for their discretionary and non-discretionary spends during lockdown but have continued post-lockdown as well indicating a larger behavioural trend. Sharp spikes were recorded in online grocery and e-commerce surpassing even pre-COVID levels, while spending on physical grocery and shopping fell substantially.
  2. Online shopping spends even higher than pre-COVID: e-commerce spends surpassed pre-COVID levels post the lockdown across all three cities. Delhi spends grew to 135%, while Mumbai was at 133% and Bangalore at 124%.
  3. Spends on essentials during unlock higher than pre-lockdown: Online grocery spends surpassed pre-COVID levels in both May-June and June-July. The highest recorded spike across categories and time periods analysed in this study was witnessed in Mumbai during lockdown when spends on online grocery spiked to a whopping 147% compared to pre-COVID levels,  nearly 1.5 times.

image-Kunal-Shah-Founder-CEO-CRED-MediaBrief.pngKunal Shah, Founder , CEO – CRED, said, “During the lockdown, spending on digital and online platforms was the only available avenue for affluent consumers.

“While the trend stemmed out of necessity, the convenience, safety and accessibility of digital has led to a sustained behavioural change where we are seeing consumers continue spending on these channels post the lockdown as well.

“This poses a unique challenge for brands as they have to figure out ways to reach affluent audiences and have to consider digital-first strategies to engage them,” Shah added.

Detailed data gathered from the analysis can be found here.

In addition to this, we have also created a lockdown spends bingo creative, that shows which city had the highest credit card spends from April- June for each category basis the data collected.

Methodology & Sample: For this analysis, CRED analyzed credit card spending patterns of over 3 million members across Delhi, Mumbai and Bangalore. The data takes February 2020 spending as a baseline and compares it to spends in subsequent months under which the lockdown and unlock time periods fall.

Spends across April-May, May- June and June-July 2020 have been compared to spends in Feb-March 2020 to understand how spending has changed when compared to the pre-lockdown period. Data analyzed, therefore, is relative spending, aimed at providing direction on how spends changed from pre-COVID levels recorded.

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