Turn t he Tide

Unlock the new consumer

path to purchase

MAY 2020
 Copyright © 2020 by Boston Consulting Group. All rights reserved.
Consumer behavior has The new normal Businesses must unlock
fundamentally changed has transformed the the new normal to help
purchase pathway revival

Turnthe
Turn the Tide
Tide
Unlockthe
Unlock the new
new normal
normal
 Great [leaders] rejoice in adversity just as Covid-19 is an
brave soldiers triumph in war unprecedented
—Lucius Annaeus Seneca
epidemic

However to win in
adversity,
companies need
to tailor strategies
to today’s unique
context and look
through layers
Facebook company Turnthe
Turn the Tide
Tide
Unlockthe
Unlock the new
new normal
normal
 While the pandemic is far from over, signs of recovery are
starting to show
Pandemic spread in different degrees across the globe Spread of disease starting to slow down in India
As of 21 May 2020

~4.9M 188 8.6

days
Decline 13.2
days
Confirmed cases globally1 Countries with cases1
Doubling rate2
April 21 May 17
UK
France
0-3 days Spain Italy
Days of doubling cases6

USA China Japan

As of 29 April 2020

Iran Decline
3-6 days India South
Korea 170 130
6-14 days
No. of red zones3
14-30 days
April 15 May 01
>30 days

~0.1M ~45K ~64K 15%4

Increase
~40%5
Recovery Rate
Total no. of cases1 Recovered1 Active1
April 19 May 20

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Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards and hence imperfect measures
1. [ NDTV Corona Virus - Live Statistics Data - accessed on 21st May 2020] 2.[BCG Analysis, Source: Ministry of Health & Family Welfare (MoHFW) website; Press reports]; 3. Press Search [Deccan Herald] [Coronavirus:
Red zone districts reduce from 170 to 130 in a fortnight]; 4. Press Search [The Economic times] [India's COVID-19 recovery rate has improved to 24.56 pc: Niti CEO]; 5. Press Search [The Economic times] [Coronavirus in Unlock the new normal
India: Recovery rate at 40%; only 6.39% cases needed hospital support]; 6. [BCG Analysis - No. of doubling days based on 7 day CAGR, Source: John Hopkins CSSE data]
The pandemic impacts the health and socio-economic
fabric; lives of consumers will not be the same
The pandemic has created a Social distancing and structural Uncertainty around income and Consumer priorities being
never-before focus on health & interventions will drive faster weakened demand potential in re-calibrated; certain behavior
safety recovery near term changes will stick long term

HEALTH & SAFETY PUBLIC POLICY ECONOMICAL SOCIAL

1 4 Public Health 7 11
Consumer Sentiment
COVID-19 Cases Measures Income Uncertainty
0.1M+ total cases in India1 • 60% of total household expenditure in hotspots; 8 of 16 categories expected to see
Social distancing enforced via reduced spends in next 6 months11
45% of consumption in hotspots non-essential6
nation-wide lockdown
• 198M workforce employed in hotspot districts7 12
2 5 Web Traffic trends
Web Trends Industry Medicine and Beverages with highest traffic
8 growth12
~120% spike in online searches on health Guidelines Inflation / Price Indicators8
& immunity in India post COVID2 12+ industries4 got relaxation in • 70 bps drop in CPI 13
restrictions Media, Smartphone Usage
• 130 bps drop in WPI
Globally, ~3Bn average MAUs across
3 9
6 Facebook, WhatsApp, Instagram &
Trade / Logistics Indicators9:
Demand of health products Monetary Messenger13; 12.5% increase in
• 35% decline in exports and
49% consumers intend to buy more Relief Measures smartphone screen time (April vs Pre-
vitamins, herbs and supplements in the 29% decline in imports COVID)14
~$13Bn infusion by monetary relief • 14% decline in retail freight traffic
coming days3
measures by RBI5 14
Mobility
10
Market Sentiment Indicators10: 40%+ reduction in number of visits to
20% decline in Nifty index since 1st Feb public places due to lockdown and social
distancing15

Source: 1. [ NDTV Corona Virus - Live Statistics Data - accessed on 21st May 2020] ; 2. [Online Search Trends (India)] 3. [BCG COVID-19 Consumer Sentiment Survey, April 30- May 03 (N = 1,327)] 4. [Ministry of Home Affairs (MHA),
Govt. of India – Guidelines released on 15th April 2020 ] 5. [RBI Notification – 17th April] 6. [BCG Analysis, Source: Nielsen-Indicus database 2017-18, Hotspot list as of 15th April (MoHFW), data compiled in 2017-18 , Press Search] 7.
[BCG Analysis, Source: Hotspot list as of 15th April (MoHFW), PLFS workforce survey 2017-18, Census 2011-12 district workforce report] 8. [CPI (MOSPI), WPI (Office of economic advisor) – Change comparison Feb 20 vs March 20] 9.
[Import-Export movement (Ministry of Commerce & Trade), Railway Traffic (Ministry of Railways) – YoY decline in March'20] 10. [Bloomberg data - As of 23-April] 11. [Source: BCG COVID-19 Consumer Sentiment Survey] 12.[BCG
Analysis, Source: SimilarWeb data *www.similarweb.com] 13. [Facebook Q1 2020 Earnings Release/ Call Transcript – 2.6Bn users just on Facebook] 14. [BARC Nielsen – TV + Smartphone consumption report during crisis, 9th April
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2020] 15. [Source: COVID-19 Community Mobility Report – India – Apr 17, 2020]
Social distancing has been the key to fight disease globally
and in India – making it the new way of living
Social distancing advocated as key measure to India is actively following social distancing
control COVID spread guidelines
India has observed a stark drop in number of visits
CDC across public places

RETAIL & RECREATION WORKPLACE

Johns Hopkins Reduction in number Reduction in number

University ~85%2 of visits compared to ~65%2 of visits compared to
baseline baseline

South Korea keeps social distancing post

South Korea COVID-19 -qz.com Strict social distancing guidelines issued for reopening workplaces3
Hong Kong extends social distancing Non-Exhaustive
Hong Kong -Bloomberg
measures as cases drop
Seating at least Gap of 1 hr.
Globally strict measures followed to ensure social distancing 6 feet away between shifts &
Up to 15 April 2020
from others on stagger lunch
job sites breaks
Closed public Closed
10+ 19+
transportation1 workplaces1
Countries Countries

1. [Oxford COVID-19 Government Response Tracker] 2. [COVID-19 Community Mobility Report (April 17, 2020) - The baseline is the median value, for the corresponding day of the week, during the 5-week period Jan 3–Feb 6,
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2020]; 3. Press Search; [Live Mint] [Coronavirus lockdown rules for offices: 6 feet apart seats, one hour gap between shifts]
Even in the face of adversity, there are some companies
who pro-actively find opportunities to grow
18% of Indian companies1 improved both growth & margin Globally too, there are success stories of companies
during the 2008-09 Global Financial Crisis, while 37% weathering historical crisis
declined in both2

AMERICAN
Increasing sales growth EXPRESS

American Express was severely threatened in the 2008 financial

A crisis by rising default rates and falling consumer demand. The
21% 18% company pivoted on new partnerships and embraced digital
technology. Its stock price has risen by >1,000% in the decade
since3
Shrinking Expanding
EBIT margin EBIT margin Uniqlo – a retail brand in Japan – grew from 5% to 30% market
B share in 2 years of downturn (1999-2000) while growing margins –
by pivoting their business model towards the white space of
37% 24% consumer need created by the crisis4

UNIQLO
Falling sales growth
1. [Indian public companies with Market Cap > $10M, excluding Banks, Insurance, Asset Management companies] 2. [BCG Analysis: Based on revenue growth & EBIT Margin growth (from FY'09 to FY'12) compared to
three-year pre-downturn baseline (from FY'06 to FY'09); Source: S&P Capital IQ Financial Statements] 3. BCG Article [Advantage in adversity: winning the next downturn] 4. [BCG Analysis, Source: BCG Valuescience, Analyst
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reports, Annual Reports]
As the current crisis unfolds in India, near term potential
exists in pockets – need to look at the de-averaged picture
More than 22 states have less than 20% cases1 Avenues may lie in different pockets
Data as of 23 Apr District classification as per MoHFW guidelines on 15 Apr 218
Very High : >=10% of
80% pan India cases Non - infected districts
Non-Exhaustive 45
cases High : >=3%, <10% of Non - hotspot districts
pan India cases Hotspot districts

Population (Millions)3
Jammu and Ladakh (18)

73%
Kashmir (407) Med : <3% of pan

11%
India cases 121 116
91
Himachal Pradesh (40) No cases 13
Punjab (277)
Chandigarh (27) Uttarakhand (46) 72 24
Haryana Arunachal Pradesh (1)
Delhi (2248) (262) Meghalaya (12)
Uttar 81 35 79
Rajasthan Pradesh Rural sub-districts Metro and Tier 1 Cities
Bihar Assam (35)
(1890) (1509) 13
(148)
Jharkhand Tripura Manipur (2) % population in non-hotspot or non- Uttar
Madhya Pradesh (49) (2) infected districts2 Maharashtra Bihar
Mizoram (1) Pradesh
(1695) Chhattisgarh
Gujarat(2407) (36)
Odisha West Bengal
Maharashtra
(83)
(5652) (456) Companies should strategically prioritize re-
Telangana (960) opening and scaling up business as lockdown
starts easing across regions
Goa(7)
Andhra Pradesh (895)
Karnataka(443)

Pondicherry (7) Potential to target specific- micro-markets

Kerala Tamil Nadu (1629) further along recovery to 'normal'
(438) Andaman
and Nicobar Islands (18)

1. [BCG Analysis, Source: Ministry of Health & Family Welfare (MoHFW) website; Press reports]; 2. [BCG Analysis, Source: Nielsen-Indicus database 2017-18, BCG Center for Consumer Insight, Press reports (Data compiled
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in 2017-18)]; 3.[BCG Analysis, Source: Nielsen-Indicus database 2017-18, BCG Center for Consumer Insight, Press reports (Data compiled in 2017-18)]
Spending sentiment translating differently across
categories; marketers need to react accordingly
Right strategic actions needed to win disproportionate share Marketers will need to identify pockets of opportunities

“Growing” Categories Wave 1 Wave 2 Wave 3 'Shrinking' Categories Wave 1 Wave 2 Wave 3
Categories with net increase in spends 23-26th Mar 17-20th Apr 30 Apr-03th May Categories with net decrease in spends 23-26th Mar 17-20th Apr 30 Apr-03th May

Fresh foods Vacation/leisure travel

Staples Business travel

Travel Public transport
Household care products
Daily essentials Spas, theme parks, concerts
Personal care products
Restaurants
OOH
Utilities (electricity, water)
Entertainment Movies at cinema hall
Mobile services Luxury brands/products

Home wifi connection Cosmetics, makeup, perfume

Apparel/fashion
Paid OTT subscription Discretionary
At-home
entertainment spends Tobacco & smoking supplies
DTH services
Alcohol
Toys & games
Food delivery
Savings Sports equipment & clothing
Saving/
Investments Insurance Non-mobile consumer electronics
Electronics
Preventive diagnostics/test Mobile electronics
Home construction/renovations
Vitamins, herbs, supplements
Home Home furnishings and décor
Health Medical procedures
Scooters/bikes
First-aid
Auto Cars
Education Packaged food & beverage
Education
Consumer sentiment Positive Neutral Negative

Note: Question text: “How do you expect your spend to change in the next 6 months across the following areas?” Categories with Top 2 Box > (5% more than average) classified as winning categories. Categories with Bottom 2
Box > (5% more than average) classified as losing categories. Categories neutral across waves: Baby/children's food, Non prescription medications, Prescription medicines, House rent, Home purchase & Home loans.
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Source: BCG COVID-19 Consumer Sentiment Survey March 23-26, April 17-20 2020, April 30-May 03 2020 (N = 2,106, N = 2,324, and N=1,327 respectively)
 Overall older & higher SEC consumers have
relatively positive outlook

Income1 Spends2
Amidst the growing
income uncertainty, % expecting lower
income in the next 6
% expecting higher
income in the next 6
% expecting decrease in % expecting increase
total spends in next 6 in total spends in next

opportunity to
months months months 6 months

identify and sharply 52 22 SEC A 42 34

target least impacted 60 14 SEC B 47 24

micro-segments 61 14
18-25 yrs.
48 28

52 23 41 34
26-35 yrs.

51 21 41 34
36-45+ yrs.
1. Question text: “How do you expect your overall available household income to change in the Next 6
months as compared to before lockdown?". Note: Self-employed includes professions like doctors, CAs, yoga
instructors, etc. Small business includes businesses with <10 employees and shop owners ; 2. Question text:

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"How do you expect your overall spends to change in the Next 6 months as compared to before lockdown?"
Note: Self-employed includes professions like doctors, CAs, yoga instructors, etc. Small business includes
businesses with <10 employees and shop owners; Source: BCG COVID-19 Consumer Sentiment Survey April Unlock the new normal
30-May 03 2020 (N = 1,327)
The most
fundamental
change from this
crisis is the
change in
consumer

Copyright © 2020 by Boston Consulting Group. All rights reserved.

behavior

Turn the Tide

Unlock the new normal
 Our research points to fundamental themes
impacting consumer behavior

SOCIAL DISTANCING: HEALTH AND HYGIENE: INCOME UNCERTAINTY:

The new normal Top of the mind Here and now concern

~85% 49% 54%

Reduction in number of Consumers intend to buy Consumers expect overall
Retail & visits to public places more vitamins, herbs and household income to
recreation compared to baseline1 supplements in the reduce in the next 6
coming times2 months3

Turn the Tide

1. . [COVID-19 Community Mobility Report (April 17, 2020) - The baseline is the median value, for the corresponding day of the week, during the 5-week period Jan 3–Feb 6, 2020] 2. Question text: “How do you expect your Unlock the new normal
spend to change in the next 6 months across the following areas?” [BCG COVID-19 Consumer Sentiment Survey 30-May 03 2020 (N=1,327)] 3. “How do you expect your overall available household income to change in the
Next 6 months as compared to before lockdown?"[BCG COVID-19 Consumer Sentiment Survey 30-May 03 2020 (N=1,327)]
These themes will create different types of changes in
consumer behavior – some more long lasting than others

REVERSAL OF PAST ACCELERATION OF EXISTING NEW HABITS

TRENDS TRENDS
Wild cards; likely to be High potential Stickiness of change is
temporary surges permanent shifts in behavior yet to be determined

These are complete reversal of how Consumer behavior was already moving Entirely new habits developed during the
consumers were behaving in the past towards these trends pandemic and while social distancing

These changes have mostly risen out of a With the pandemic, the trends have Consumers who gain positive reinforcement out
constraint or fear vs. convenience or choice gained momentum and accelerated of the habits may retain them

These trends will likely last in line with Positive reinforcement is essential for consumers Ecosystem facilitating and feeding these changes
recovery period to adopt them in the long term can make it last longer

Turn the Tide

Unlock the new normal
11 trends of consumer behavior emerge
This will deeply impact purchase pathways in the new normal
REVERSAL OF PAST ACCELERATION OF NEW
TRENDS EXISTING TRENDS HABITS

1 5 9
Bringing the Embracing digital
Remote way of living
Outside Inside services & experiences
Social 6
Accelerated adoption of
10
'D'o 'I't 'Y'ourself
Distancing e-commerce and O2O

7 11
Strive for Health & Superior hygiene &
Wellness clean living: a new norm
Health &
Hygiene 2
Trust in brand
8
Rise of 'Smart shopper'
above all else
3
Trading down &
bargain hunting
Income
4
Uncertainty Shopping for Utility

Wild cards: likely to be temporary High potential permanent shifts: Stickiness of change is yet to be
surges in line with recovery period linked to positive reinforcement determined
Turn the Tide
Unlock the new normal
11 trends of consumer behavior emerge
This will deeply impact purchase pathways in the new normal
REVERSAL OF PAST ACCELERATION OF NEW
TRENDS EXISTING TRENDS 51% consumers saw HABITS
60% increase
an increase in in Instagram
1 5 payment via digital
9 Live views in a
Bringing the Embracing digital wallets4 Remote way of living week6
Outside Inside services & experiences
79% consumers are not going
Social out of house, except work1 6 50%
Accelerated adoption of
10
Spike in new
of all consumers expect 'D'o 'I't 'Y'ourself hobbies and
Distancing e-commerce and O2O to increase e- habits
commerce spend in
7 next 1 month 5 11
63% consumers are paying Strive for Health & Superior hygiene &
more attention to origin of
Wellness 91% Indian
clean living: a new norm
product2 households
Health & 40+% may increase washing hands
spend on Health & more often7
Hygiene 2
Trust in brand
8 Wellness8
Rise of 'Smart shopper'
above all else
3 43% consumers are expecting Informed purchase
Trading down & decision; High salience
decrease in overall spend in next 6
bargain hunting of digital research
months3
Income
4
Uncertainty Shopping for Utility Purchase triggers expected to
become more "functional"

Wild cards: likely to be temporary High potential permanent shifts: Stickiness of change is yet to be
surges in line with recovery period linked to positive reinforcement determined
1. Question text: “What is your likely behavior for following activities once the Lockdown is lifted?"[BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020 (N=1,327)] 2. [KANTAR – COVID-19 Barometer India Research
report – 3rd April 2020] 3. "How do you expect your overall spends to change in the Next 6 months as compared to before lockdown?" [BCG COVID-19 Consumer Sentiment Survey, April 30-May 03 2020 (N=1,327 respectively)]
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4.“How would you describe your usage behavior in past 1 month?" [BCG COVID-19 Consumer Sentiment Survey April 17-20 2020 (N = 2,324)] 5. BCG COVID-19 Consumer Sentiment Survey (India), March 23-26 2020 6. [Facebook
India Data - Week ending March 28 vs Week ending March 17] 7. [KANTAR – COVID-19 Barometer India Research report – 3rd April 2020], 8. [BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020 (N=1,327)]
 1
Bringing the
Outside Inside
With social distancing, indoor is becoming the new
outdoor
Pre-COVID, consumers showed inclination towards Outdoor movement will likely continue to be restricted;
experiences consumers trying alternatives3

77% consumers indulged in experiences1 Immediately Within a few Within a few In 1 year or
Never
after weeks months more
% respondents who did the
61 experience last year
49 Movies in theatre 12% 31% 38% 14% 5%
33 29
20

Travel Entertainment Indulgence Adventure Personal Eating out 14% 33% 39% 13% 1%
Development
With lockdown, consumers are being forced to stay
indoors2

RETAIL &
Trying to avoid Keeping a distance Not going out of house, RECREATION WORK SOCIALIZE
public places in crowds except work

'Old hobbies become Working from home4 'Social Bonding in

survival mantra for many Physical Distancing' -
85% 87% 79% during lockdown' - TOI 79% Indian Express

1. Question: In last 1 year, did you indulge in the mentioned experiences at least once? [BCG – Emerging consumer trend report, 2019] 2. Question text: “What is your likely behavior for following activities once
the Lockdown is lifted?" [BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020 (N=1,327)] 3. Question text: “If coronavirus were to be under control, after how long do you think your spending would
return to normal i.e., similar to before the Coronavirus outbreak?" [BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020 ( N = 1,327)]; 4. % respondents who selected "I'm working from home now
instead of going to office/ work place [BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020 ( N = 1,327)];
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Source: Press Search
 1
Bringing the
Outside
Opportunity for brands to customize offerings and
communication for in-home consumption
Inside

In India, the ‘Stay Home’ & times on

‘Ghar Pe Raho’ sticker was used over
6M Instagram1

1 Brands adapting campaign messaging

around 'Stay at home' 2 Brands offering interesting things to do
while ‘Stay at home’ 3 Brands delivering outdoor services inside
your homes

Zee5 Global launched

the 'stay home, stay
entertained'
Telecom players SBI launched
campaign and
used Facebook to #GharSeBanking
leveraged Facebook
drive awareness for campaign on Facebook to
to scale their
staying safe at home maximize the adoption of
subscription
and promoting digital banking products
program, catering to
online transactions in the wake of the country
entertainment
for recharge at home wide lockdown
seeking consumers in
lockdown

Source: Facebook case studies; 1. Facebook Internal Data Turn the Tide
Unlock the new normal
 Consumers gravitating to
2

Opportunity for all brands to

Trust in brand
above all else

brands they can trust deepen relationships

Consumers focusing on origin of product and brand's Limited co-relation between brand awareness
response to the crisis; loyalty to trusted brands continue and trust across categories (25-50%)3

Thus fair game for large / small / established /

Believe that brand's response to crisis would have impact on future new brands to establish trust
65% purchase likelihood1

63% Paying more attention to origin of products2 Opportunity to build deeper

customer relationships by
responding to the crisis and being
59% Continuing to purchase same brand as always2
their "lockdown and transition
partner"
Focus on product origin is much more pronounced in India
than other countries2 Opportunity for "Made In India"
USA 35% play in messaging for categories
63% where consumers will care more
India
about local sourcing / product
UK 25%
origins
South Korea 46%
Italy 40% 1. [Edelman trust Barometer,2020 (Global number;
Germany 20% report includes India)] 2. [KANTAR – COVID-19
Barometer India Research report – 3rd April 2020]; 3. Turn the Tide
France 34% Data of only urban consumers [Source: CCI Survey & BCG Unlock the new normal
analysis]
 2
Trust in brand
above all else
Both established and niche players are stepping up to
deepen consumer relationship by building trust
Responding to crisis and being "lockdown and Pivoting on "Made in India"
transition partner" themes

Facebook’s ‘I For India’ concert to raise

FB funds for GiveIndia COVID-19 relief
Give
Raised for
India 85+
Top Indian and
60+ Cr COVID-19
Global stars
relief ZOHO Launched 'Swadeshi Sankalp', to provide
online platform for classes and free
classes to govt. schools. Also providing
Launched Ola Emergency service to help free customer support software to govt.
OLA citizens who are in need of taking medical & meeting spaces
trips amidst lockdown

Launched #RadissonCares across social

J&J
media platforms to bring insights in
Radisson housekeeping, F&B, elderly, health & Tulips J&J & Tulips are going to supply "Made in
wellness care India' nasal and throat swabs for testing
COVID
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Source : Company website; Press/ Social Media search; Facebook Case Studies
 3
Trading down
& bargain
Markets may witness trading down in the short term;
micro-market opportunities will emerge
hunting

Income uncertainty creating mixed sentiment; Expectation of deals/discounts is one Majority of those who reduce spends
Both planned reductions & increased spends of the key reasons to increase will prefer to buy a cheaper
expected across categories1 spends2 brand/variant3

Overall SEC SEC 18-25 26-35 36-45+

A B yrs. yrs. yrs.

32 34 24 28 34 34
~35% ~70%
43 42 47 48 41 41

% expt. increase in total spends in the next 6 months Expecting discounts across Planning to buy cheaper brand/
% expt. decrease in total spends in the next 6 months categories variant

Target micro- segments with more Explore value for money offers (e.g. Prop up value for money variants in
resilience (affluent, older etc.) in discounts on volume / loyalty etc.) portfolio and proposition to win this
targeted campaigns to attract this segment segment

1.Question Text: "How do you expect your overall spends to change in the Next 6 months as compared to before lockdown?" 2. Average % of respondents across select categories expecting deals/ promotions/
discounts (as a % of consumers who are planning to increase spends) 3. Min % of respondents planning to buy a cheaper brand/ variant across select categories from consumer sentiment survey (as a % of
consumers who are planning to reduce spends)
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Source: BCG COVID-19 Consumer Sentiment Survey, April 30-May 03 2020 (N = 1,327)
 4
Shopping
for utility
Value consciousness will lead to more utility led
shopping; right triggers can induce purchase
Purchases across many categories have been driven by more Marketers are designing their brand messaging
celebratory/experimental needs1 around in-demand use cases3

Eat-out 15 20 22 30 12
Eat out restaurants like
Dominos are highlighting
15 42 12 12 20 additional utility around
Apparel
ordering home delivery like
reduced work around cleaning
Functional Celebratory Spontaneous Experimental Ritualistic Upgradation
dishes etc.
With growing income uncertainty purchase triggers expected to
become more 'functional'
Japanese creative
54% Consumers are expecting lower income in the next 6 months2 agency Whatever collaborated
with Japanese fashion
Transition in purchased triggers designer Akihiko Kimura to create
WFH Jammies, an outfit that
"I must plan a party for Friday "I am too tired working the whole week, looks formal on video, but is
evening should probably order home delivery loose & comfy outside the frame
"Let me experiment with this "I need to replace my jeans because these
new style of jeans don't fit me
1. Question Text: Now I want you to think about the last time you purchased XYZ, what was the occasion/reason for your purchase? Data of only urban consumers [BCG Analysis, Source: CCI Survey]; 2. Question
text: “How do you expect your overall available household income to change in the Next 6 months as compared to before lockdown?" [Source: BCG COVID-19 Consumer Sentiment Survey, April 30-May 03 2020 (N
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= 1,327 respectively) 3. Press/ Social Media search
 5
Embracing
digital
services &
Acceleration in digital led by social media; more
consumption across news, games & entertainment
experiences

Social media growing in importance as one stop for staying connected, entertained and well-informed

Increasingly wide reach – 3 Bn Increased preference for virtual

consumers actively using Facebook, connects - Voice and video calling more
Instagram, WhatsApp or Messenger than doubled across Messenger and
each month1 WhatsApp in hardest hit places by COVID1

INCREASED DEMAND FOR DIGITAL MORE TIME SPENT PLAYING ONLINE INCREASE IN CONSUMPTION OF
CONTENT GAMES ONLINE NEWS

Content producers are New Players are entering Engagement observed Social gaming apps are COVID-19 serves a blow Consumers are planning
turning towards OTT the OTT segment across the day2 gaining popularity3 to print media to continue behavior
Producers court OTT Snapdeal enters the OTT “The most interesting thing "Activity on social features of COVID-19 hits print
platforms to cash in on race, partners with is that while our user peak WinZo Games such as usage of media hard-ads as
summer movie season Hungama play to offer was between 8 pm and video and audio while playing circulation dip, editions
- The HINDU video streaming content midnight, we now see a the game have also doubled" see major digital push 63%
- Business Insider relatively flatter (and – Co-Founder WinZo games - ThePrint
higher) engagement
throughout the day – % new users likely to
Founder, Rein Games continue in future4

1. Facebook Q1 2020 Earnings Release/ Call Transcript - 2.6Bn MAUs just on Facebook 2. Press Search [YourStory] [Online gaming startups see a surge as India locks down to fight coronavirus]; 3. Press Search
[Economic Times] [For Indian gaming startups, Covid-19 lockdown is a boon for business]; 4. Question Text: "Willingness to continue in next 6 months" [BCG COVID-19 Consumer Sentiment Survey April 17-20 2020
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(N = 2,324)] ;Source: Press/ Social Media search
 5
Embracing
digital
services &
Consumers embracing digital in historically offline
categories like Education & Health and Fitness
experiences

Traditional learning models faced an unprecedented setback and Social distancing and increasing health awareness led to interest in
digital emerged digital health services

32 Cr. 90 Mn 24 K
Students hit by COVID-19 as schools and colleges are shut1 Health conscious individuals3 Gyms and Studios across India impacted3

Kendriya Vidyalayas go COVID-19 : COVID-19 lockdowns: Theaters, gyms to be shut Coronavirus is making Locked gyms due to
digital to impart IIT Roorkee resumes AICTE releases list of 41 in Mumbai, 5 other cities India's gyms and dance Coronavirus outbreak!
education during teaching through digital free digital resources for in Maharashtra over studios sweat How fitness industry sees
lockdown mode students coronavirus - Yahoo Finance innovation and growth
- NDTV - HT Media - HT Media - HT Media - Financial Express

Unacademy Learning App Sadhguru - Yoga, Meditation & Spirituality Cure Fit

Increase in time spent2 Increase in time spent2 Increase in time spent2

101% 202% 120%
Unacademy launched 20,000 free live classes4 Online Yoga Practice sessions to Cult fit started online classes to support
help immunity consumers to workout from home5

1. Press Search: [ThePrint] [In India, over 32 crore students hit by Covid-19 as schools and colleges are shut: UNESCO]; 2. [BCG Analysis, Source: App annie data (Time spent data) – Change comparison March 4th
Week vs March 1st Week] 3. Press Search: [LiveMint] [How India pays for fitness]; 4. [Unacademy Blog – 12th March 2020]; 5. Press Search [Business Insider] [Cult.fit goes online to support people to workout from
Turn the Tide
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home amidst Corona shutdown]
 Embracing 5
digital
services &
experiences
Digital payment platforms
become more important in Sharp rise across digital payments in With strong likelihood to continue in

the customer purchase the last 1 month… the next 6 months

Digital wallets
journey % consumers1 % consumers2

RBI pushes digital payments in the 51% 25% 25% 60% 22% 18%
time of COVID-19
- Economic Times

Net banking/online banking

NPCI urges India to use digital

payments to reduce social contact 46% 30% 25% 50% 30% 20%
and contain Covid-19 outbreak
- NPCI Press release
Increased Same Decreased More than usual Same Less than usual

We are seeing an uptick in our switch partners from

FinTech to the rescue: Rural India
turns to digital modes of payment
There is a 15% increase in incoming requests
from offline merchants to partner with Paytm3
whom our users can buy essentials/staples such as
groceries, medicine and food3
– PAYTM spokesperson
– PhonePe Spokesperson

- The Banking & Finance Post

1. Question text: "How would you describe your usage behavior in past 1 month" [BCG COVID-19 Consumer
Sentiment Survey, April 17-20 2020 (N = 2,324)] 2."How do you expect your usage behavior to change in the Turn the Tide
next 6 months" [BCG COVID-19 Consumer Sentiment Survey, April 17-20 2020 (N = 2,324)]; 3. Press Search Unlock the new normal
[LiveMint] [COVID-19: Digital payments see uptick in user base]
 5
Embracing
digital
services &
Brands have started using digital extensively to attract
and engage consumers
experiences

Exploring new digital models and service innovations

Cult.fit BMW Penguin eat shabu
Launched telemedicine services & is Launched an immersive shopping Promoted to-go boxes with Facebook posts &
offering 80+ online sessions daily, with experience online with a touch of customers could order through Messenger –
over 25k+ members personalization achieved 350 sales in one min

Use of digital marketing to deliver broader brand communication goals

Swiggy MAX Health Insurance Nykaa
Using app, Social media & blog for Digital Vernacular video led campaign on OTT for Launched Nykaa Network, an online-only
PR, safety standards and thought leadership #IgnoreNahiInsureKaro beauty forum to share beauty tips and
strengthen brand persona

Leveraging digital to engage with consumers

WHO Asian Paints UpGrad
Launched the #SafeHands challenge on Initiated the #HarGharKuchKehtaHai Collaborated with influencers on
social media platforms like Instagram, campaign on Instagram to interact Instagram to promote upskilling campaign
partnering with celebrities with the consumers in lockdown #rahoambitious

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Source: Press/ Social media search, Company website, Facebook case study
Accelerated 6

Surge in preference for online channel sharper in India

adoption of
E-commerce
and O2O

Household Personal Fresh Packaged Health

care (%) care (%) food (%) food (%) supplements (%)

China 19 22 7 9 7

India 33 44 31 34 43

Brazil 4 5 0 2 3

Indonesia 18 33 12 13 47

Thailand 9 11 -16 3 26

Philippines -6 -7 -12 -17 14

The reduction in e-commerce was caused by a shortage of delivery staff due to a strict lockdown

Source: BCG COVID-19 Consumer Sentiment Survey, 2020 (N = 1,255 Brazil; 2,532 China; 2,106 India; 1,528 Indonesia; 1,017 Thailand; 1,015 Philippines).
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Note: Question was “In the next one month, how do you expect your online spend for the following types of products to change?” (Focus on income segments middle class and higher.)
 6
Accelerated
adoption of
E-commerce
Indian consumers may spend higher on E-com, even for
traditionally offline categories
and O2O

~50% of all consumers expect to increase E-com spend in next one month

38% 37% 34% 35%

45% 42% 38% 39% 39% 45%
64% 64%

53% 55% 55% 54%

44% 44% 48% 47% 46% 43%
30% 31%

Apparel/ fashion Mobile phones Household Personal care Cosmetics, Packaged food Non-prescription Fresh foods Consumer durables Home appliances First aid Vitamins,
care products products makeup, perfume & beverages medications supplements

Historically Low online

High online propensity
moderately online propensity

Same More than usual

Note: Question text: “In the next one month, how do you expect your online spend for the following types of products to change?”
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Source: BCG Analysis - BCG COVID-19 Consumer Sentiment Survey (India), March 23-26 2020
 7
Strive for
health and
wellness
Consumers increasingly becoming This presents an interesting
more health conscious opportunity for brands across
categories
Spike in online searches on health &
120%
immunity1 Opportunity for H&W players to
emerge as category leaders and
44-52% respondents may increase spends across sub- categories2 demonstrate thought advocacy

23
25 23 17
Opportunity for brands from other
29 27
categories to enter lucrative
25 26
adjacencies in H&W

Opportunity to engage and attract

Preventive Vitamis, herbs, Medical First-aid
consumers with tailored messaging
diagnostics/test supplements procedures around health and wellness
A lot more Somewhat more

1. [BCG Analysis: Online trend data (India) – April 1st week vs Jan last week]; 2. Question text: “How do you expect your spend to change in the next 6
months across the following areas?” [BCG COVID-19 Consumer Sentiment Survey April 30-May 03 2020 (N=1,327)]; Press search, trends analysis, BCG
Turn the Tide
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Analysis
 7
Strive for
health and
wellness
Brands are demonstrating leadership, entering lucrative
adjacencies and highlighting benefits around H&W
Demonstrate category Expand Engage and Attract with
leadership into adjacencies messaging around H&W

Launched Tulsi Drops immunity Turned their Instagram page into a

Dabur booster packs to capitalize on the Kiehl's virtual mental health and wellness
FirstCry launched a Thought preventive healthcare trend centre
Leadership campaign using FB
Live to engage and help new
parents through Live Online
sessions during COVID-19 GCPL expects shift in consumer Partnered the initiative 'Muskurayega
habits with a greater focus on health, India' to help build hope & mental
Godrej hygiene - evaluating launch of new
Star wellness in these times
products in the category

Practo partnered
with Thyrocare to conduct Launched ‘Haldi doodh’ (turmeric Launched a digital film on Athletics
Practo Covid-19 detection tests to Amul latte) known for immunity boosting Fastrack day & fitness challenges in
cater to surging demand in properties collaboration with HealthifyMe
test

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Source: Press/ Social media search; Company website; Facebook case study
 8
Rise of 'Smart
shopper'
We expect salience of research and 'smart shopping' to
become even more important post the pandemic
Pre-COVID, Indian urban consumers were With more health awareness and more caution around spending, research before
trending towards 'smart' shopping shopping will become more critical

Consumers check
85% 2+ data points Coronavirus has made people more Locally produced products may fast become a necessity for retailers and
during purchase1 conscious of the journey consumers concerned about products originating from countries where
novel coronavirus (COVID-19)
-Inc42
has spread
-Nielsen
Top info checked across categories2
Manuf/Exp Features Manuf. Place Reviews Importance of certain decision criteria will increase
Vehicles
48% 30%
Gadgets
32% 30% 31% 30%
Apparel
31% 37%
Food
63%
Features Manufacturing place Reviews

Most checked Frequently checked

Critical for brands to create a consumer pathway conducive for this 'smart shopper'

Enable frictionless digital discovery; Seamless mixed pathways to

40% Consumers conduct online research transparent and clear info around allow an involved buying
before /during a purchase3 decision making criteria experience

1. [Avg. # data points consumers checked across all categories answered (except discounts option), Source: BCG - Emerging consumer trends report] 2. [BCG Analysis - Question:
While making a purchase in this category last year, what information did you check before/during purchase?, Source: BCG Emerging consumer trends report] 3. Urban
Turn the Tide
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consumers – [Source: BCG CCI Digital influence study] Source: Press Search; BCG Analysis
 9
Remote
way of living

Globally, ~3Bn

Social media WHO Health Alert

~700M daily
actives use
WhatsApp and
average monthly
active users
(MAUs) across Instagram Live

ever so service has reached

12M+ people via
WhatsApp1
Messenger globally
for calling, doubled
since COVID-19
Facebook,
WhatsApp,
Instagram &
views increased
more than 60% in a
week3

important in outbreak in many

countries2
Messenger, with
2.6Bn MAUs just on
Facebook 2

Social
distancing Dedicated Twitter
Snapchat
launched a
new AR lens to connect
Twitter handle for COVID-19 Snapchat with WHO's 'Covid-19
updates4
Solidarity Response
Fund'5

1. Press Search [LiveMint] [Report as on 15 Apr 2020] 2. [Facebook Q1 2020 Earnings Release/ Call Transcript] 3. [Facebook
Data - Week ending March 24 vs Week ending March 17]; 4. Press Search [Economic Times] [Government launches dedicated
Twitter handle for COVID-19 updates]; 5. Press Search [HT Media] [Snapchat rolls out AR lens for WHO’s Covid-19 response
Turn the Tide
Unlock the new normal
fund]
 9
Remote
way of living
Brands have started leveraging the need for virtual
connect in their brand messaging
Brands are centering product messaging Brands are leveraging consumer's need to
around WFH socialize virtually
Peter England Budweiser
pushing their summer spring collection as
organized a 3-day virtual party to engage
'WFH clothing' through brand sites
with consumers

Airtel Xstream Shein

fiber highlighted consumers can enjoy organized a global streaming event with
office-like internet at home in their product celebrities and influencers to support
messaging COVID relief

Spotify
has centered its communication on Globally, every day 800 Mn+ daily actives
Instagram around ''WFH' – asking are engaging with livestreams across
consumers how their work desks are workout classes, concerts etc. on Facebook
looking like platforms1

1. [Facebook Q1 2020 Earnings Release/ Call Transcript]

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Source: Press/ Social media search
 10
'D'o 'I't
'Y'ourself
From Do It For Me to Do It Yourself: Social distancing
has triggered a new habit
Opportunity for brands to innovate &
Consumers have picked up new …Leading to increasing traction
engage via moment marketing & user
chores / hobbies during lockdown on social media platforms
generated content
Interest in India (Dec '19-Apr '20)1
100 Allen Solly
Launched a campaign for the
Mar 19: Janata Curfew
kids line, asking consumers to
first announced
create something with their
kids and tag them
50

Borosil
Initiated a contest for the
Dec 2019 Mar 2020 consumers to cook their
How to make How to cook favorite recipe and tag them to
win
Increasing media coverage on DIY topics
Apple
Started #TheAtHomeSeries
on Instagram promoting
consumers to share pictures
clicked on IPhone

1. Online Trends Data (India)

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Source: Press/ social media search; Company website
 11
Superior
hygiene &
clean living a
Hygiene is here to stay: Superior practices Stickiness observed
getting embedded in consumer DNA
new norm
in China in the
aftermath of the
Increased focus on Penetration increasing pandemic5
hygiene every week
Still buy masks and
Interest over time in India1 > 2 lakh users added every week 83% disinfect for storage at
+525% home
100 Janata Curfew Hand Sanitizers4
16.3
first announced (New triers %
Penetration build up) 13.3

9.5
50 Disinfectant 6.3
Hand wash 4.4 Turn wearing masks
Sanitizer 65% into a daily habit
Mar Wk1 Mar Wk2 Mar Wk3 Mar Wk4 Apr Wk1
Dec 2019 Jan 2020 Feb 2020 Mar 2020

Indian Households washing hands more

91% often now2
> 1.5 lakh users added every week
Hand Wash4 16.4
(New triers %
Couldn't purchase a hygiene category that 14.2
Penetration build up)
17% they were looking for because of emptying 9.5
Pay more attention to
shelves3
5.1
8.0 76% the sterilization and
disinfection
41% Bought a new hygiene category3
Mar Wk1 Mar Wk2 Mar Wk3 Mar Wk4 Apr Wk1

1. [BCG Analysis, Source:Online trends data], 2. KANTAR: COVID-19 Barometer India Research Webinar (3rd April); 3. [KANTAR: COVID-19 Barometer India Research Webinar (3rd April) Turn the Tide
– World Panel Division]; 4. [KANTAR Report - 10 Slides to Make You Think COVID-19, India – 23rd April 2020 - Urban India Data (March: Week 1, 1st to 7th; Week 2 8th to 14th; Week 3, Unlock the new normal
15th to 21st; Week 4, 22nd to 28th; April: Week 1, 29th to 4th; Week 2, 5th to 11th)] 5. [KANTAR: COVID-19 Impact on Indonesian Attitudes and Behaviours report (14th April)]

Superior
hygiene &
clean living a
Brands are responding with category extensions or
benefit articulation around hygiene themes
new norm
Established brands
are entering into the
hygiene category
Marico is foraying into the hand
sanitizer category with the launch
of sanitizer, as part of it's Mediker
brand, best known for anti lice
shampoos
ITC has launched 2 products in
hygiene space – 'Savlon Surface
Disinfectant Spray' and a new
hand sanitizer 'Savlon Hexa'
HUL recently acquired feminine
hygiene brand Vwash from
Glenmark to expand its portfolio
in the hygiene segment
Cavin Kare is launching hand
sanitizers under Chic and Nyle
brands including sachets and bulk
packs
Source: Press/ social media search; Company website
…while service sector is
inculcating hygienic practices
as key differentiator
Swiggy introduced 'safety badges'
for restaurants complying with
highest standards of hygiene (e.g.
temp. checks, masks, 4 hr
sanitation, safe packaging)
PVR is planning alternate seating in
movie theaters & hygienic practices
in F&B serving
Indian Railways will likely
reintroduce the 5x hike in platform
ticket prices from pre lockdown in
March to deter overcrowding
11
Innovations in hygiene &
sanitization space to cater to
evolving demand
Nippon Paint (Japan) developed
Antivirus Surface Coating to safeguard
against viruses from adhering to
surfaces
Baidu developed an open source AI
model to detect whether individuals in
a crowd are wearing masks (97.3%
accuracy) & a non contact infrared
temperature monitoring system
AEON Big, a Malaysian supermarket
retail chain undertook major
sanitization & cleaning initiatives to
continue operations during the COVID
crisis
Starbucks China set up safety stations
at entrances to do temperature checks
& sanitization – 95% of its stores have
reopened by March
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The purchase
pathway is
undergoing a
fundamental
change

Copyright © 2020 by Boston Consulting Group. All rights reserved.

What will it take
for you to win?
Turn the Tide
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 The new pathway is changing and filled with opportunities: fast movers will win
Portfolio & Messaging Value Focus Presence & Influence

Strengthen Brand
Positioning
PURCHASE

Tweak messaging
Digital proliferation and changing
PRE

and portfolio focus

choice drivers present opportunities Tap Here and
to play in targeted,
Now
emerging Adjust to the
opportunity:
adjacencies new normal
Induce and
Incentivize of
Channel & Engagement
purchase to engagement:
deliver value Significantly
PURCHASE

Delivering targeted, seamless shopping Capture the redesign your

experience will be key to win expanding online digital
wallet engagement
Win with
disproportionate customers
share of new online
adopters and
PURCHASE

aggressively retain
POST

Opportunity to retain and develop customers

brand advocates in the new normal

Turn the Tide

Unlock the new normal
 Digital proliferation and changing choice drivers present opportunities

Bringing the Embracing Remote way Rise of Trading Shopping for Strive for Trust in Superior DIY
Outside digital of living “Smart down and Utility Health & brand above hygiene & Do It
Inside services and shopper” bargain Wellness else clean living: Yourself
experiences hunting a new norm

Optimize Relook media mix Create

Build Social Connect in Social Distancing personalized
Portfolio for model to build
1 Value efficiency in engagement @
Engage with consumers in their
creation acquisition scale
context
4 5
• Build surround with branded 6 Moment
content from creators & • Segmenting • Align to new
PRE-PURCHASE FUNNEL

publishers consumers media marketing

• Use in-home creative solutions to drive landscape • Use social
differential • Accelerated media for
value role of campaigns
Focus on Hyper-Localisation • Showcase regional on trending
2 Connect with consumers where value for • Catalogues for themes and
they are money: prospecting build
• Hyperlocal solutions for discounts, customers in saliency
targeting, optimization, lead bundles adjacent
management & categories
communication Win consumer trust
Bring alive Experiences with digital access 7
3 Sequential messaging by cohort
New product launches, in-person demos
• Virtual launches and product demos • Interactive & engaging story-telling on
• Conversational solutions with chat bots for safety and wellbeing
personalized recommendations
Turn the Tide
Medium Term Short Term Unlock the new normal
 Delivering targeted, seamless shopping experience will be key to win

Accelerated Bringing the Embracing Trading down

adoption of e- Outside digital & bargain
com and O2O Inside services & hunting
experiences

8 Replicate In-Person experiences, from trials to conversion

Convert trials to sales 11 Create Financial Access

• Digital innovations like AR/VR/Filters to solve "touch-and-feel” barrier
• Payment / financing
options e.g. EMI,
Build Online presence spot loans
9
PURCHASE FUNNEL

• Segmented
Own Platforms and Influencing communication
Marketplaces
• Direct to Consumer models
• Collaborative Performance Ads
Partner with online retail partners
• Conversational Commerce with
Messaging tools

10 Create cohorts for deep customer connect

• Micro targeting
• Custom audiences to gain scale

Turn the Tide

Medium Term Short Term Unlock the new normal
 Opportunity to retain and develop brand advocates in the new normal

Remote Rise of
Trading down & bargain hunting
way of living “Smart shopper”

Strengthen CRM solutions

12

• Messaging for post sales communication and other digital CRM tools
POST PURCHASE FUNNEL

Drive Value by repeat purchase and consumer up-trade

13

• Remarket with customized offers for up-

trade or repeat purchase
• Incentivize social peer recommendation
to create post purchase advocacy

Turn the Tide

Medium Term Short Term Unlock the new normal
 Accelerated Bringing the Embracing Remote way Rise of Trading down Shopping for Strive for Trust in brand Superior DIY
adoption Outside digital of living “Smart and bargain Utility Health & above else hygiene & Do It
of e-com and Inside services and shopper” hunting Wellness clean living: a Yourself
O2O experiences new norm
1 4 5 6
Build social connect in social distancing
Relook Media
• Build surround with branded content Optimize Create
Portfolio for Mix Model Personalized
• Use in-home creative solutions
Value creation • Align to new engagement at
PURCHASE

2
Focus on hyper localization • Segmenting media scale
PRE

consumers to landscape • Moment

• Hyperlocal solutions for targeting, • Accelerated role
optimization, lead management & drive marketing - Use
differential of regional 7 social media for
communication • Catalogues for
3 value Win Consumer Trust campaigns on
Bring alive experiences with digital access • Showcase prospecting trending
value for customers in Sequential messaging by cohort themes and
• Virtual launches and product demos adjacent • Interactive & engaging story-telling
• Conversational solutions with chat bots for personalized money build saliency
categories on safety and wellbeing
recommendation
8
Replicate In-Person experiences, from trials to 11
conversion Create Financial
• Digital innovations like AR/VR/Filters to solve
PURCHASE

Access
"touch-and-feel” barrier • Payment /
9
financing
Build Online presence
options e.g.
• Own Platforms & Influencing EMI, spot
Marketplaces via D2C models, loans
collaborative performance ads • Segmented
& Conversational Commerce communicat-
10 ion
Create Cohorts for deep
Customer Connect
• Micro targeting 12
• Custom audiences to gain scale Strengthen CRM solutions
PURCHASE

• Messaging for post sales communication and other digital

CRM tools
POST

13
Drive Value by repeat purchase and
consumer up-trade Turn the Tide
• Remarket with customized offers
Medium Term Short Term • Incentivize peer recommendation
Unlock the new normal
About the Authors

SHAVEEN GARG VIKASH JAIN NIMISHA JAIN

Managing Director and Partner, BCG Managing Director and Partner, BCG Managing Director and Partner, BCG
Technology & Digital Expert India Head, TMT Practice Asia Pacific Head, MSP Practice
Garg.Shaveen@bcg.com Jain.Vikash@bcg.com Jain.Nimisha@bcg.com

KANIKA SANGHI WAMIKA MIMANI

Partner and Associate Director, BCG Project Leader, BCG
India Head, Center for Consumer Insight Core Member, TMT Practice
Sanghi.Kanika@bcg.com Mimani.Wamika@bcg.com
Turn the Tide
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