Sunday, February 22, 2009

Indian Consumer buying Habits 2 - Aversion to Credit


Again this is also more of a cultural issue, we have been told since our childhood days "one should spend only within his/her means", so we have had a general aversion to credit and more focus is one savings, as can be seen from our high savings rate.


Now this has changed with the younger consumers, the generation which has started working after liberalisation is more open to idea of taking credit to buy TV, Fridge, Homes. And marketing has also contributed to this shift in consumer habit, with credit card companies and banks aggressively promoting the 'spend today and pay later" philosophy. But if one were to appreciate the values the older generation still holds against the idea of credit one needs to flash the plastic in front of their parents and ................

Though just when one thought the days of being conservative with the use of plastic were gone, the slowdown in the economy has again brought this issue back into focus. The stories of how many consumers took up large loans to buy flats and cars and are now struggling with their repayments either because of pink slips or salary reduction. This would force many consumers into their shells and become more cautious in availing credit and so though not back to square one but atleast a small step back....

1 comments:

Anonymous said...


Again this is also more of a cultural issue, we have been told since our childhood days "one should spend only within his/her means", so we have had a general aversion to credit and more focus is one savings, as can be seen from our high savings rate.


Now this has changed with the younger consumers, the generation which has started working after liberalisation is more open to idea of taking credit to buy TV, Fridge, Homes. And marketing has also contributed to this shift in consumer habit, with credit card companies and banks aggressively promoting the 'spend today and pay later" philosophy. But if one were to appreciate the values the older generation still holds against the idea of credit one needs to flash the plastic in front of their parents and ................

Though just when one thought the days of being conservative with the use of plastic were gone, the slowdown in the economy has again brought this issue back into focus. The stories of how many consumers took up large loans to buy flats and cars and are now struggling with their repayments either because of pink slips or salary reduction. This would force many consumers into their shells and become more cautious in availing credit and so though not back to square one but atleast a small step back....

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