Global Consumer Spending to Drop by 8.6 Percent in 2020
The coronavirus pandemic has changed almost every aspect of people’s daily lives, and consumer spending is no exception. The uncertainty of the COVID-19 crisis caused considerable changes in consumer habits, forcing them to cut down their budgets and prioritize spending.
According to data presented by Stock Apps, the coronavirus outbreak is expected to cut global consumer spending to $44.3trn in 2020, an 8.6% plunge year-over-year.
$4.2trn Drop in Spending Amid COVID-19 Crisis
Falling consumer spending has significant effects on overall Gross domestic product (GDP) growth, considering it accounts for almost 70% of GDP.
Before the COVID-19 crisis, global consumer spending has witnessed steady growth for five years in a row, revealed Statista, IMF, United Nations, World Bank, and Eurostat data. In 2015, it amounted to over $41.5trn. Over the next twelve months, this figure rose to $42.5trn and continued growing. Statistics show that in 2019, consumers worldwide spent a total of $48.5trn, the highest amount in a decade.
However, the coronavirus crisis triggered a sharp fall in 2020, with global consumer spending expected to plunge by $4.2trn year-over-year. Nevertheless, statistics show the following years are set to witness a recovery, with consumer spending growing by 20% to $53.5bn in 2022.
Statista data also revealed that Switzerland represents the leading country globally, with over $40,000 in consumer spending per capita in 2020. Luxembourg ranked second with around $5,000 less than that. Iceland, Denmark, and Norway follow, with $34,300, $25,800, and $25,600, respectively.
60% of Consumers Changed their Shopping Behaviour
The McKinsey&Company survey showed consumers became increasingly cautious with their spending in 2020. Even after countries lifted lockdowns, many consumers still see their incomes fall, forcing them to reduce budgets and change shopping habits.
Statistics show that increased time spent indoors led to significant growth in consumer spending on groceries, household, and home entertainment. Brazil, South Africa, and India lead in this category, with up to 30% consumer spending growth. Major consumer markets like the United States, United Kingdom, Germany, and China witnessed around 15% grocery shopping growth in the first half of the year.
However, with consumers being mindful of their spending and turning to less expensive products, 2020 has witnessed a plunge in clothes and accessories, outside entertainment, services, travel, and transportation spending. Respondents in all countries said they cut down spending in these categories between 20% and 50%.
The McKinsey survey also revealed the COVID-19 outbreak triggered a significant change in the shopping mindset. More than 60% of consumers globally have tried a different brand or shopped at another retailer during the crisis, mostly for convenience, value, and quality.
In China and the United States, over 75% of consumers reported trying a new shopping method, and 60% plan to stick with it post-crisis. The United Kingdom and Germany follow with 71% and 54% of consumers who practiced new shopping behavior. In Japan, where lockdowns weren’t imposed, only 33% of consumers changed their shopping mindset.
Tony Elumelu Receives Licence to Kick Start Heirs Insurance Limited, Heirs Life Assurance Ltd
The Chairman of Heirs Holdings, Tony O. Elumelu, on Friday said the company has received operating licences from the National Insurance Commission (NAICOM) for its two new insurance companies, Heirs Insurance Limited (HIL) and Heirs Life Assurance Limited (HLA).
The Chairman disclosed this on his social media page.
In his words, he said “I am proud to announce that the Nigerian Federal Government, through the insurance regulator, the National Insurance Commission (NAICOM), has officially issued the operating licences for our new Group insurance companies – Heirs Insurance Limited (HIL) and Heirs Life Assurance Limited (HLA).
“This represents an important milestone of a long-term strategic journey in providing much needed, quality, & valuable financial services, to a broad demographic in Nigeria. Insurance should not be a luxury, and just as we have democratised other sectors, we will democratise insurance – applying our tried & tested business philosophies.
“Fueled by the determination to improve lives & leave a legacy in the African private sector, we have embarked on this journey to revolutionise the insurance space – deploying technology, customer understanding & operational excellence.
“It has been a five-year journey, but with the optimism & the resilience that have brought us this far, it has been worth the wait.
“I would like to warmly thank our new CEOs—Dr. Adaobi Nwakuche, MD/CEO of Heirs Insurance and Niyi Onifade, MD/CEO of Heirs Life Assurance, our Board members, regulatory partners, those who have believed in this dream, despite the obstacles, & those who have cheered us on.”
This is coming barely two weeks after Mr. Elumelu announced Transcorp has acquired Afam Power for N105 billion.
Ndubuisi Ekekwe Moves to Deepen Capabilities Through Free Weekly Business Lessons
In a bid to deepen business and individual capabilities across the African continent, Prof. Ndubuisi Ekekwe, Founder of Fasmicro and the Lead faculty, Tekedia Institute, on Sunday said he will commence free business lessons to enhance accumulation of capabilities.
In a message forwarded to all members of the platform, Tekedia.com, Prof. Ekekwe, explained that when businesses accumulate capabilities, they move upstream and create new competitive tentacles which eventually form the foundation of their growth.
“More so, because of the capabilities, they protect their market shares through strategic moats against competitors and new entrants,” he stated.
Prof. Ekekwe plans to send out two business lessons per week to engage Tekedia’s growing community on the mechanics of business systems. “Each piece would be prepared to pass across a business lesson.”
Prof. Ndubuisi Ekekwe writes regularly in the Harvard Business Review and has spoken at global events — explaining and teaching the mechanics of business systems and nation-building.
To start receiving his free business lessons sign up here.
FG Introduces NEXIT Portal for Npower Batch A and B Beneficiaries
The Federal Government has introduced a new online portal for exited Npower beneficiaries of batch A and B.
According to the Minister for Humanitarian Affairs, Sadiya Farouq, the portal was launched in collaboration with the Central Bank of Nigeria (CBN) to enable exited Npower beneficiaries apply for available federal government empowerment options.
This was disclosed in a statement issued by Nneka Anibeze, the media aide to the minister, on Friday.
The ministry said the NEXIT portal will be used to determine the suitability of exited beneficiaries for various CBN-affiliated programmes.
She explained that selection will be based on the conditions and criteria set by the apex bank.
Ms Farouq, therefore, urged interested exited Npower beneficiaries to log on to the NEXIT portal and provide the required additional information for possible placements into central bank’s intervention options.
“The Minister expressed her deep appreciation to the CBN Governor Mr Godwin Emefiele CON for his support adding that the Ministry of Humanitarian Affairs remained committed to the vision of Mr President to lift 100 million Nigerians out of poverty in the next 10 years.
“Minister Umar Farouq pledged the Ministry’s willingness to collaborate with relevant agencies of government and other stakeholders towards the realization of that vision and congratulated the exited beneficiaries while wishing them well in their future endeavours.
“The Federal Government of Nigeria is very proud of the milestones you have achieved during your period of service to the nation. As we prepare to exit into prospective endeavours.”
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