According to Kasi’s Index of Consumer Sentiment, the Democratic Republic of Congo (DRC) has experienced persistently negative consumer sentiment over the past year. The sentiment reached its lowest point in September 2022, plummeting to -25 points, while its peak of -13 points was observed in February 2023. This consistent negative trend is primarily linked to declining indices for both current and future expectations among households. Interestingly, despite the prevailing pessimism, there is a ray of hope as the personal finance index remains positive. Despite the overall negative sentiment, consumers in DRC seem to maintain a relatively positive outlook on their personal financial situations.
Amidst inflationary pressures, households are prioritizing essential products.
When respondents were asked about the sectors where they observed the most significant price increases, a clear trend emerged, with the majority pointing towards essential categories. Notably, a staggering 83% of participants mentioned that food and beverages experienced significant price hikes during the period, making it a prominent concern. Additionally, 77% of respondents highlighted utilities such as water and electricity as another sector where they felt the impact of rising prices. Moreover, 68% of those surveyed reported increased costs for transportation, including expenses like gas and bus fares, which further contributed to their financial burdens.
Interestingly, these essential categories witnessed considerable price increases between November 2022 and March 2023. On the contrary, non-essential items, exemplified by Alcoholic Beverages, showed a different pattern, experiencing a substantial decline in price increase from 69% in November to 38% in March. This shift in spending behavior can be attributed to the prevailing high cost of living, prompting households to reassess their budget priorities and focus on essential necessities while cutting back on non-essential items.
Changing purchase behavior takes top priority.
Amidst inflationary pressures, consumers across different segments have implemented various strategies to cope with rising costs. The most common action taken by respondents was changing their purchasing habits, which ranked first overall, transcending gender and age groups. The second most prevalent approach involved lifestyle changes to reduce expenses, showing a widespread recognition of the need to adapt to inflation. Additionally, respondents, particularly females and Millennials, are utilizing community services as a means of support in tackling rising costs. Gen Xers are more inclined to use their savings to cover expenses, highlighting the financial strain experienced by this age group. Purchasing cheaper alternatives was another adopted tactic, favored by males. Meanwhile, Gen Zers are actively searching for sales and promotions, showcasing their proactive approach to finding money-saving opportunities.
To remain relevant in the evolving market, brands need to be vigilant and adapt to the changing consumer patterns.
As essential categories like food, utilities, and transportation experience significant price increases, consumers are likely to become more value-conscious and cost-sensitive. For value brands, there is an opportunity to attract budget-conscious consumers who prioritize affordability and seek cost-effective options. With the majority of respondents adopting changes in purchasing habits and exploring cheaper alternatives, value brands can position themselves as reliable choices that offer essential products and services at competitive prices.
On the other hand, premium brands may face challenges in this changing landscape, as consumers may prioritize essential spending over luxury items. With 68% of respondents reporting increased transportation costs, premium brands in the transportation sector may experience reduced demand as consumers prioritize budget-friendly options. However, premium brands can still leverage their unique selling points, such as quality, exclusivity, and superior customer experience, to maintain a loyal customer base. They may need to adapt their marketing strategies to emphasize the long-term value and benefits of their products or services, even in the face of short-term cost considerations.
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