The Post-pandemic Consumer Market: What Doesn’t Kill Us Makes Us Stronger
Consumer market has been able to adapt to new conditions and is actively restoring
The post-pandemic consumer market is the segment that probably suffered the most at first. At the same time, it is the segment that managed to transform the most and took the least time to do so. <...> According to SberIndex, over the last week of May consumer market gained 7% year-over-year. This is the highest growth rate in the post-pandemic year — Max Seddon, Correspondent, Financial Times in Russia.
Despite the outstripping growth of online trade, consumers are going back offline after the pandemic
[The start of the pandemic, – Ed.], resulted in an explosive growth of online commerce. It means that it attracted the people that had never used it before, such as older generations, for example. Interestingly, they never left, which is something our colleagues from online commerce would be able to tell us more about. As for us, we got multiple customers who had never used online banking before. It was a completely new experience for them. Yet, they were unable to go to a bank office, so they opted for our cards, because [bank, – Ed.] representatives could come to them. For a lot of people, it was a point of no return. <...> Now offline is back. We can clearly see it — Anna Mikhina, Vice President, Head of Ecosystem Services Development Department, Tinkoff Bank.
Consumers have become more critical of a brand philosophy
Consumers are very careful when it comes to what a brand means for them. Every brand has a functional part to it, which is basically the purpose it serves. Yet, there is also an emotional part to it. Consumers do care what products or brands do for the society and what it has done or created to help each of us feel and live better. This is another trend that changed during the pandemic. I believe [this trend, – Ed.] is here to stay. If a brand or a product does not have a mission, I think their future is debatable — Igor Radakovic, General Director, Reckitt Benckiser Healthcare in Russia, Ukraine & CIS.
People are tired of online education, yet it keeps growing
Yes, there was a certain slowdown [in online education, – Ed.] after all of it was over [the active part of the pandemic, – Ed.]. In a lot of cases, parents commented: “God forbid this online education ever again”. <...> It was mainly driven by the fact that the infrastructure was not ready. True that, platforms crashed; the quality of content was poor, etc. Yet, people tried new things. Now we see that the upward trend is still there. We track all the existing online schools. Last year, all online schools shared a total revenue of roughly RUB 60–70 billion. This year, for the schools we monitor this number will reach RUB 120 billion — Georgy Solovyov, General Director, Co-Founder, Skyeng.
Consumer activity in Russia has gone through a significant decline
53% of Russian consumers <...> state they suffered because of the pandemic. This is more than the global <...> average. 70 % of Russian consumers have cut their grocery spending. If you look at food retail, the fastest growing company is Svetofor, a supermarket chain that is not represented here [at the Forum, – Ed.]. They do not even have a normal website, let alone online commerce. Yet, online trade is growing fast. In Russia, 95 million people use Internet daily. <...> Last year, grocery delivery gained 250%, while marketplaces, e-commerce [online commerce, – Ed.] gained 108% — Max Seddon, Correspondent, Financial Times in Russia.
Consumers are back from the modern model of consumption to cost saving
Before March 2020, Russia’s experience economy was gaining traction, much like everywhere else in the world. It means that people enjoyed spending money on self-learning or travelling or pretty much anything that stayed with them for a long time. This boom of consumerism was gradually fading. At least it seemed so. At the same time, the sharing economy was on the rise, i.e. people started using car sharing or renting apartments on Airbnb, which gave them a chance to stay anywhere in the world. Then all of it pretty much crashed. Not overnight, of course, but within a couple of months. People’s earnings dropped. Those people, who had at least something left were anxiously looking for something to invest in. I believe this factor in particular and lots of free time drove the investment market boom — Anna Mikhina, Vice President, Head of Ecosystem Services Development Department, Tinkoff Bank.
Online business is trying to retain the customer through discounts and high-quality service
As soon as the opportunity to go to a cinema presented itself, people started going out, because watching a film in a cinema or eating out with friends is different from cooking and having a meal at home. <...> It feels like people are tired of online services. <...> The pendulum of public opinion swung in the opposite direction. We are actively studying what makes people choose offline over online. For example, when it comes to groceries, [consumers, – Ed.] are not always sure of their freshness. In terms of clothing, they are not always sure it will fit. [We, – Ed.] deal with complaints and offer cash back and discounts. Latest surveys show that before customers valued other customers’ comments and photos in online shopping. Yet, now they mostly value the opportunity to compare prices and find discounts — Anna Mikhina, Vice President, Head of Ecosystem Services Development Department, Tinkoff Bank.
Companies follow trends and focus on customers
Our [strategy, – Ed.] has changed drastically. <...> Instead of being brand-centric or brand-focused, [we are now, – Ed.] consumer-centric. What does it mean? It means we need to pay attention to consumer behaviour, because consumers are the focus of our attention. <...> Trends change fast and behaviours change fast — Igor Radakovic, General Director, Reckitt Benckiser Healthcare in Russia, Ukraine & CIS.