The economic crisis is creating shock waves across consumer markets, causing brands to rethink their strategies in a bid to adapt to changing customer behaviour.

“Consumers are becoming much more price conscious so they’re either buying smaller packs or dropping out of discretionary categories altogether,” said Managing Director of Hemas Consumer Brands Sabrina Esufally, in a recent interview with Ruwandi Perera for LMDtv.

While acknowledging that consumers are open to switching brands in their quest for better value, she shared an interesting observation from looking at consumer behaviour over the last 12 months: “Consumers are not willing to trade out of good quality products for the sake of a price point.”

In terms of shopping behaviour, she emphasised that due to the prevailing liquidity crunch, “consumers don’t have cash in hand for their big monthly shopping routine.”

“So what we see is that they buy what they can with the money in hand and then maybe top up towards the end of the month, depending on what their needs are at that point,” she added.

Consumers are also brand loyal. “They’re very reluctant to switch from a brand that they’ve trusted over the years,” Esufally maintained.

She explained that “within categories, there’s a difference in the standard of care that consumers take when making choices. In some personal care categories like baby and oral care, and sanitary napkins, consumers are very reluctant to shift from the brands they trust.”

“When inflation accelerated, we knew that we had no choice but to increase prices,” she recounted, adding that it was a difficult but necessary decision that helped the fast-moving consumer goods (FMCG) sector survive and also reinvest in brands “to give consumers better value.”

Esufally shed light on emerging trends in consumer behaviour, mainly revolving around the growing base of Gen Z customers. She explained: “Gen Z consumers are seeking brands that are sustainable in their value chains. These are not brands that greenwash but go the extra mile to ensure their value chains are sustainable.”

“Due to social media creating such fragmented needs and preferences, Gen Z is really looking for brands or product offerings that have been personalised for them. They typically reject a one-size-fits-all brand and product approach,” she noted.

She also touched on Euromonitor’s global consumer trends for this year – namely, that there will be a great deal of responsible but emotional spending worldwide.

Esufally commented: “The word ‘responsible’ is interesting. If you look at 2023, we are not alone in the economic crisis – many South Asian markets are going through something similar although it may not be as grave as in Sri Lanka.”

“So consumers are going to rally around products that they feel are essential. Some discretionary categories will see more consumption drops than others and consumers are going to reevaluate their buying behaviour,” she asserted.

Esufally continued: “In terms of responsible purchasing, consumers want to buy into brands that they feel are making an impact and environmentally sustainable.”

“While we don’t really see a willingness to pay for those tenets in a brand in Sri Lanka, we certainly see this playing out around the world,” she observed.

The Managing Director of Hemas Consumer Brands emphasised the need for local companies to change their business models to complement this trend “so that when Sri Lankan consumers are willing to pay, we’ll be ahead of the curve.”

As for the need for civic-mindedness in today’s society, she stressed that the private sector – especially companies that build brands – must position their brands to address burning issues that may widen social inequalities and intervene to close the gap as much as possible.

“If everyone does their bit, the path to recovery will be faster than it would have been otherwise,” she asserted, in her concluding remarks.