COVID-19 has seen consumers across the world ditch cash and in-person shopping in favour of online spending, according to Standard Chartered’s latest global survey. Almost three-quarters of survey respondents in Pakistan (72 per cent) agree that COVID-19 has made them more positive about online shopping, but they are also more careful with their spending and want new ways to track their money digitally.
The study of 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US – is the second in a three-part series, looking at how COVID-19 has transformed consumers’ way of life, and what changes could be here to stay. While the first survey focused on the pandemic’s impact on earnings, the second offers new insights into the way the global health crisis is changing consumer spending habits.
Respondents in all 12 markets anticipate doing more of their shopping online from now on. In Pakistan, 76 per cent preferred to shop in-person prior to the pandemic compared to 24 per cent online. But this has shifted, with more than one-third (37%) now preferring online payments to in-person card or cash payments for future purchases. This increase in preference for online payments is true across a range of purchases, from groceries and travel to digital devices.
As a result, almost three-quarters of Pakistanis are now more positive about shopping online. However, despite the increased enthusiasm for shopping online, only 39 per cent of Pakistanis expect their country to go fully cashless in the future, the lowest of all the countries surveyed.
The shift online is supported by Standard Chartered’s ATM withdrawals data. Across the ten surveyed markets, where Standard Chartered offers retail banking (all except the UK and US), COVID-19 has dramatically accelerated the decline in ATM usage. Cash withdrawals from ATMs are now half what they were two years ago.
Meanwhile, as spending begins to creep up with lockdowns easing globally – 57 per cent of those in Pakistan reported increased spending in July (46 per cent globally) – more than three quarters (79 per cent) of people in Pakistan say the pandemic has made them more careful with their expenditure.
Reflecting this increased caution, 62 per cent of survey respondents in Pakistan said that the economic impact of COVID-19 has made them more likely to track their spending, with 77 per cent either using or wanting to use budgeting tools.
Consumers around the world, including in Pakistan, are now spending more on basics – such as groceries and healthcare – and digital devices than they did prior to the pandemic, and they expect this increase to continue in the future. Out of all the countries surveyed, Pakistan has reported the greatest increase in spending on healthcare (58 per cent) and charitable donations (37 per cent) compared to before the pandemic.
Meanwhile, 66 per cent of people in Pakistan say they have spent less on travel/holidays than they did before the pandemic, while 57 per cent have spent less on clothes. This trend is expected to continue in Pakistan with 31 per cent saying they anticipate spending less on travel/holidays and 27 per cent on clothes in the future.
As well as being increasingly careful with their spending, consumers are becoming more conscientious. This is good news for small businesses and those producing locally made goods, particularly those making and selling sustainably sourced products. In Pakistan, more than half of people say they are now more likely to shop locally (66 per cent), more sustainably (56 per cent) and with small businesses (63 per cent).
Mr. Syed Mujtaba Abbas, Country Head Retail Banking, Standard Chartered Bank Pakistan said, “In the current extraordinary and uncertain times, people are being more cautious with their spending. Keeping track of where your money goes has never been so important. As per our data, Online payments have increased but there is more banks can do to help. With three-quarters of people either using or wanting to use budgeting of financial control tools, it’s imperative that banks continue to innovate digitally so that clients can easily transact, track and manage their spending in a safe and secure way.”