Impact of Covid-19 on consumer behaviour and International Business
The human race is dependent and so are their wants. Wants are recurring and never-ending. Every consumer has their own want. But this pandemic is hitting hard on the wants of the consumers as it's difficult to even fulfil basic necessities at present. It is about the needs and not the wants anymore. Circulation of money has come to a standstill. Investing in hygiene is the new normal. It's almost like how much you yourself are prepared for this pandemic. Wearing a mask has become mandatory. Consumers are no more investing in luxurious items. Economy, on the whole, has come to a slowdown. But, why is the consumer behaving like this? What is driving consumers to go for more online orders instead of regular buying? Yes, COVID is one reason but it is not the first time when a consumer has changed his buying pattern. Consumers have been reshaping their minds from ages. So it's important to get a basic understanding of consumer behaviour as everything depends on the consumer in an economy.
What is consumer behaviour?
According to Louden and Bitta, ‘Consumer behaviour is the decision process and physical activity, which individuals engage in when evaluating, acquiring, using or disposing of goods and services’.
In simple words, consumer behaviour is the study of how the consumers make a purchase decision and what are the factors that affect their decisions. There are many factors that affect the decision of a consumer. Some of the factors can be personal relating to age, occupation and lifestyle. Others can be social including status and family. Perception and beliefs fall into psychological factors. Cultural factors like culture and subculture can also affect the decision of a consumer. Now, Let's see what all has changed because of COVID and how it has impacted consumer behaviour.
Environmental changes
With almost more than half of the world under lockdown, pollution has come to a new low. Air Quality has improved massively due to less vehicular movement and industrial activities. Humans are breathing in much cleaner air than before. The consumers are investing more in healthy products and have even started using organic products like turmeric, Giloy and garlic which are considered as good immunity boosters. Many reports also suggested the healing of the ozone layer and earth on the whole because of lesser human activities due to the lockdown.
Buying pattern changes
This pandemic has insisted on consumers to think in a different way. A clear-cut change is seen in the buying pattern of consumers. As people are home most of the time, spending scenario has shifted from general to household products. Consumers across the globe are thinking twice before making a purchase. Consumers are spending more on digital platforms. Window shopping has seen a major downfall. People are spending less on clothes and more on groceries.
Economic changes
Major economic changes that took place after COVID are as follows:
- Social distancing became the new trend.
- Celebrations and cremations have become more close and personal now (presence of fewer people) resulting in losses to event management companies.
- Local Kirana shops have taken over big brands as the consumer has become price-conscious.
- E-commerce is a new market for various goods and services.
- The shift in demand can be easily seen. Demand for food grains like wheat, rice and pulses has risen. Same goes for the healthcare industry. Medical stores are making huge profits.
- Supply shift can also be seen due to the shortage of food grains and medical essentials in many countries.
- Travel and tourism industries caught a high soon after the announcement of COVID as everyone was moving back home but that was the last high of the travel and tourism industry after the discovery of this pandemic. Today, the travel and tourism industry is one of the worst affected industry including aviation, hospitality, and other important services.
- Another major impact of COVID turned up on the daily wage labourers. Many of them have to suffer and die due to lack of money and food.
- Millions of people lost their jobs across the world but the demand for doctors, nurses and frontline workers remained high. Countries like the USA and Yemen are severely affected by unemployment and humanitarian crises.
- The construction sector also saw a halt but maintained itself to an extent.
- Education became a bit cheaper and accessible with the help of internet. Top Ivy league universities announced many unique online courses for free.
- Prices of automobiles and crude oil also came down amidst the lockdown.
- Demand for mobile data services increased resulting in a spike in the telecommunication sector.
- Fluctuations in the gold price and stock market remained throughout the pandemic.
- Less number of road accidents while more number of domestic violence and divorce cases were reported.
- Hunger and suicide rates have also seen a sharp rise due to the pandemic. People are being forced to pay rent no matter what and migration has become difficult.
International Business changes
As soon as the virus crossed the borders every other business was affected by it. COVID not only impacted the businesses within the lines of a single territory but it impacted adversely on the trade and businesses widely. No sector was spared by the pandemic be it import or export. Both import and export declined due to the COVID crises. Except for iron ore and pharmaceuticals all other sectors registered negative growth for India. The trade deficit narrowed and the GDP also tumbled. Disruption in the supply chain is just another reason for the losses.
Although with the removal of lockdown now, things are coming back to normal except for the number of people getting infected by the COVID. Businesses are gaining momentum and are trying their best to recover losses. Government is bringing new policies to revive the economy. Clearly, the choice between life and livelihood is not that easy but humans are giving a tough fight to this pandemic.
~ By akansha singhal for Young Engine