India’s Buying Propensity IndexTM (BPI) for the quarter ending March 2017 stood at 0.42 (measured on a scale between +1 to -1),a fall of 16% BPI over Q3 which was at 0.50. The BPI is a result of a primary research conducted every quarter among 3,000 consumer-influencers across eight Tier–I cities in India.
December, the month after demonetization, had witnessed a sharp fall to the lowest BPI at 0.26 in the months since April 2016. Prior to that, there had been a steady climb in BPI from June at 0.37 to November at 0.68. January 2017 saw a noticeable rise to 0.47, the highest in FY17 and there has been a continuous fall of the propensity to buy in subsequent months, with February 2017 showing 0.43 on lesser-than-expected relief in the Union Budget. The Buying Propensity Index fell further to 0.35 in March, a slip of nearly 20% and perhaps the nation has not taken the landslide win in UP too well, which snuffed out all opposition for the ruling party juggernaut. Other factors such as the lowering estimates of India’s 2016-17 GDP, high retail inflation, and IIP contraction could have played a role too.
Commenting on the findings, N. Chandramouli, CEO, TRA Research (a Comniscient Group Company), said: “The last six months would be a very memorable period for those living in India. The very fact that India’s quarterly BPI for Q4 ends at the same number as Q1 may be a bit misleading, as this period has witnessed much buying recalibration by all, and sharply contrasting sentiment by many. However, the clear indication is that the worst of the DeMo effect is over.”
“There are sharp contrasts are between Mumbai and Delhi, with the former showing the highest BPI among eight cities and Delhi showing the lowest, with a gap of 114% between them. The other important finding of this Quarter is that in March the sentiment of country’s buying or Environmental BPI is the second lowest in six months, standing at 0.28.”, Chandramouli added.
With regard to the city-wise BPI, the highest Buying Propensity was seen in Mumbai with Q4 BPI at 0.58 (Highly Positive) and Pune with Q4 BPI 0.54. The lowest Propensity to Buy was seen in Delhi with BPI at 0.27 and Ahmedabad with BPI at 0.30, showing extremely low propensity for purchase.