Covid & consumption

LAHORE: Pandemic has drastically changed consumer behaviour for many entrepreneurs to rewrite their business plans.

This is true for daily use consumer goods. Buying trend in apparel, home textiles, shoes, and cosmetics has undergone a drastic change. Remote buying (online) has gained strength forcing many retailers to establish and streamline online sales. Buying trends changed because people are no longer gathering in the same places they used to show off their affluence through what they were wearing.

The use of luxury goods is basically to show the society the difference between a wealthy and ordinary person. This gave rise to brands. But brands also came under immense pressure even before pandemic as the online stores came up with innovative designs and in some cases complete replicas of famous brands. There was no difference between a lady carrying an original Gucci handbag and an exact replica twenty times cheaper than the original.

Still the rich had a way of showing off their wealth as they could have different handbags matching each of their dresses or wearing sweaters of different shades at each outing. Life has changed for the rich after the pandemic.

The poor still wander around in the streets but the rich have locked themselves in their homes. They cannot exhibit their luxurious living style to the world. Now they buy casual wear through online stores. They cannot go to the gymnasiums for fear of contracting a deadly virus. So they have arranged home gyms. They cannot visit restaurants and have a lot of spare time so they have started cooking themselves (both men and women) as well ordering online food. Covid-19 hit the rich more severely in its first wave. But after that the richer segments of society have observed all corona related SOPs. In the second and third wave we saw few cases of Covid-19 among the affluent.

Still we see markets as crowded as they were in pre-pandemic days. They are mostly people from poor and lower middle class families. The third wave of pandemic has severely impacted these segments of society. Business turnover in these markets is less than what it used to be in pre-pandemic days but the crowds gives the impression that business is going on as usual.

The retailers are complaining of low sales. The brands have been badly hit. The branded apparel and fabric sales crossed Rs450 billion a year in pre-pandemic days. The sales of branded textiles used to be 25 percent of the total in volume but over 70 percent in value. Brands sales have come down appreciably though exact statistics are not available.

The poor are starved of resources. Their main expenditures now are food, utility bills, and transport. They buy clothing as and when required though poor women do indulge in the luxury of buying cheap fabric and apparel two times more than their men.

The sales of shoes and jewellery have suffered as there are restrictions on outings. The restrictions on functions have curtailed the bulk sales of many edibles particularly that of chicken meat.

Still we see the rates of chicken meat climbing to new highs. The rates of chicken earlier used to nosedive as soon as there were any restrictions on the use of chicken meat at wedding feasts. The chicken breeders are earning more by selling less.

While the rich have abandoned the fashion wear after pandemic they have found ways to consume their spare wealth on other luxuries. We see the sales of SUVs ballooning after the attack of Covid-19. The rich can exhibit their wealth through these luxury cars by going on leisure drives. Their businesses are operating in profit.

Their expenses have been drastically curtailed. Their visits outside the country have been severely restricted. A rich family of five used to visit Europe, America or the Far East at least two times a year. The minimum expense including tickets, boarding and lodging averaged Rs400,000 per person per trip. Now that there are no visits that money is saved. They can now easily divert this money into cars and real estate.

They save a lot on parties they used to throw quite often.

In businesses the carmakers, the food manufacturers, the cement producers and the poultry farmers are in the driving seat. The small retailers are suffering while some online retailers are thriving. Those that swindled the consumers have gone into oblivion.