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 two-thirds of survey respondents around the world (73 percent in the UAE) 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.
In the UAE, 72 percent said they preferred to shop in-person prior to the pandemic compared to less than a third online. But this has shifted significantly, with almost half (47 percent) who now prefer online payments to in-person card or cash payments. 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 two-thirds of people in the UAE (64 percent in the UAE and 64% globally) now expect the country to go fully cashless, with a majority of the public expecting this to happen by 2030.
Respondents in all 12 markets anticipate doing more of their shopping online from now on, with people in Kenya foreseeing a 30 per cent increase in their online spending, followed by those in the UAE thinking it will increase by 18 per cent and those in Indonesia by 16 per cent. While still anticipating an overall increase, respondents in the UK, Mainland China, the US and Taiwan believe their online spending will only grow by less than 10 per cent in the future.
The survey results are 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 as lockdowns ease globally – 46 percent of those in the UAE reported increased spending in July (46 percent globally) – 89 percent of people in the UAE say the pandemic has made them more careful with their expenditure (75 percent globally).
Reflecting this increased caution, 77 per cent of survey respondents in the UAE (62 per cent globally) said that the economic impact of COVID-19 has made them more likely to track their spending, with over 80 per cent either using or interested in using budgeting tools or tools that block card-spend over specified limits.
Commenting on the findings, Sonny Zulu, Head of Retail Banking, Standard Chartered UAE said: “The UAE is on a fast track in adopting digital banking and cashless payments and the pandemic has accelerated the digital drive. This is also mirrored in our digital transformational strategy at the Standard Chartered. We see consumers in the UAE, 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.”
Meanwhile, in the UAE, 68 percent of people say they have spent less on travel/holidays than they did before the pandemic (64 percent globally), while 42 percent have spent less on experiences (41 percent globally) and 64 per cent have spent less on clothes (55 percent globally).
This trend is expected to continue in the UAE with 38 percent saying they anticipate spending less on travel/holidays, 22 percent on experiences and 35 per cent on clothes in the future.
As well as increased caution when it comes to spending, consumers around the world are increasingly conscientious. This is good news for small businesses and those producing locally made goods, particularly those making and selling sustainably sourced products. In the UAE, more than half of people say they are now more likely to shop locally (61 percent), more sustainably (59 percent) and with small businesses (55 percent). This is particularly true of younger generations (18-44), suggesting this trend is likely to continue.