The Hindu Business Line : Splurge beckons

Ashwin Jacob, a thirty-something software professional, is on his weekly book shopping expedition. He spends a couple of thousand rupees every week on buying an eclectic assortment of books, including the occasional rare edition, to add to his library. And has the economic downturn affected his spending on books? ``Not really,'' he responds, but adds that he has cut down a wee bit on some other expense so that he can spend his weekly quota on books.

Similarly, Ritu, a freshly minted MBA in her twenties spends a fair amount on clothes and shoes every month. And though she refuses to reveal just how much she actually spends, she does reveal that it's "quite substantial".

With incomes on the rise and lifestyles changing rather dramatically, it's no longer considered sinful to spend. And while basics such as food, accommodation and transport still account for a major chunk of spending by Indian consumers, the spends on travel, entertainment, fitness and hobbies are increasing at a fair clip.

But has the economic slowdown had an impact on spending?

``Total spending itself has not gone down, it's just that consumers are spending differently,'' says an analyst. He points out that consumers have re-jigged their spending patterns and are spending less on things such as consumer durables, food and grocery and so on.

On the other hand, people are forking out larger amounts on things like entertainment, eating-out and travel. Consumers are also spending more on communication, but are also getting savvy about using technology to cut costs while retaining the personal touch.

For instance, SMS usage reportedly zoomed during the Diwali and Christmas season, as did the usage of e-cards.

``Consumers found that these options added a personal touch while remaining cost effective,'' says the analyst.

For instance, when Interaxons, a Bangalore-based company that works in customer relationship and interaction management, ran a market research exercise in Bangalore, Chennai, New Delhi and Mumbai, it found that approximately 54 per cent of the respondents spent on entertainment options such as eating out and visiting clubs at least two or three times a month.

The study also found that around 40 per cent of the respondents spent books, music and the like several times a month. Comments Vipin Tyagi, President & CEO, Network Programs India Ltd, ``Much more money is being spent on family-oriented services such as vacations abroad and dining out."

He adds that the increase in the number of vehicles on highways on weekends and other holidays is testimony to the fact that middle-class India is serious about having fun!

Take Harish Bijoor, the COO, of Zip Telecom Ltd, who admits to being an impulsive buyer, especially when it comes to the latest gizmos.

``I love these new `techie' stuff and do most of my impulsive buying when I am travelling overseas,'' he says. However, he is quite emphatic in declaring that spending must ``be a sub-set of what one earns and not a super-set of the income that flows in." And while he does not approve of being miserly, he also believes that it is necessary to spend wisely, and only spend what one can afford. Arvind Nair, CEO, Domino's Pizza India Ltd, echoes this viewpoint. Nair, who believes in the philosophy of `careful spending' declares that he will always spend with care.

J.M. Sampath, Managing Director, Arpitha Associates, a Bangalore-based HR training firm agrees that it makes sense to be prudent when it comes to balancing one's spending and earning, especially with credit cards becoming more available.

But at the other end of the spending spectrum is Kapil Kapoor, Managing Director, Timex Watches Ltd, who is quite candid about his fondness for spending without a care.

``I have always been one who believes in a better tomorrow, so I would typically overspend,'' he declares.

So, what is it that average Indian executive spends on?

For Sampath, most impulse purchases are for his family and friends. In addition to the usual household expenditure, the family also spends on food items such as pizzas. And while Sampath has no reservations about spending on his family, he does not spend much on himself.

Bijoor for one confesses to having a weakness for chocolates and wine and spending on these, more so when he is travelling. But he declares that he is not a big spender on luxuries. Most of his family's spending is on education and entertainment. On the education front expenses are incurred for his children to attend special programmes the school organises, school outings and related events. He adds that his family buys a lot of books and spends a good amount on this activity. ``We read quite a bit and books today are pretty expensive,'' he exclaims. He adds that his family loves eating out and does so quite often.

Similarly, C. Mahalingam, Vice-President, Human Resources, Hewlett Packard India, says he enjoys spending on clothes and books, particularly books on management. Admitting that he has a weakness for readymade clothes, he reeals that he also splurges on ties.

Apparel also figures on the shopping list of Jaswinder Narang, the General Manager of the Le Meridien in Pune. His interest in spending on clothes stems from the fact that one of the requirements of being a hotelier is the need to be well-dressed. ``Your clothing certainly makes you portray the image of being a successful businessman.

There's no doubt that dressing well always makes you feel good from within and gives you a lot of self confidence,'' he adds. Narang also fancies spending on men's colognes, ties, cufflinks and golf T-shirts. Family holidays in exotic locations are yet another item Narang spends on.

Travel also figures on Kapil Kapoor's agenda in a really big way. "Whatever extra disposable income I have will be spent on vacationing in different parts of the world,'' he declares. Sita Singhal, Senior Manager, Communications, Whirlpool of India Ltd, also enjoys travelling, especially to foreign destinations. Dilip Kapur, President of the Pondicherry-based Hidesign, enjoys spending on travelling, but not to Europe or the US as he travels to these destinations rather often in the course of his work.

However, what he really enjoys splurging on, is his passion for antiques, especially Buddha statues and old paintings. He also has a fascination for Burmese sculptures and spends on building his collection.

But for Huzan Fraser Motivala, Area Director, Sales & Marketing, Le Meridien India, it's sailing that gobbles up a substantial chunk of her time and money. ``I spend most of my free time and a lot of my money on my hobby — sailing,'' she says. Describing sailing as ``the most divine experience", she adds that she also likes shopping for clothes and jewellery.

Another hobby, golf in this case, accounts for a sizeable portion of Sanjay Sharma's spending.

Sharma, who is Le Meridien's Regional Director of sales and marketing operations in India and Nepal, says he spends most of his money on golf and golfing equipment. He also has a passion for fine watches. ``I spend a substantial amount of my time and money on this,' 'he declares. Priyanka, a Delhi-based visual merchandiser perhaps gets the new approach to spending spot on when she says, ``it's great to be able to spend, especially on someone or something special."

And isn't that what spending is all about? Adding that extra zing to life.

With inputs from Anjali Prayag, (Bangalore) and Richa Mishra, (New Delhi).

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