A majority of consumers expect Kenya to go cashless in future, indicating the biggest shift in preference for online shopping globally, but consumers are much more cautious and conscientious with their spending.

This is according to Standard Chartered’s latest global survey. The study found out that almost three-quarters of survey respondents in Kenya (64 per cent globally) 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 our way of life, and what changes look 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.

Respondents in all 12 markets anticipate doing more of their shopping online from now on. In Kenya, 79 percent preferred to shop in-person prior to the pandemic compared to 21 per cent online. But this has shifted significantly, with more than half (51%) now preferring online payments to in-person, card or cash payments for future purchases. At 30%, this is the largest increase in preference for online shopping of any market surveyed.

Respondents in the UK, China, the US and Taiwan, while still anticipating an overall increase, are at the other end of the scale, believing their online spending will grow by less than 10 per cent in the future.

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 (64%) of people globally and 60%  in Kenya now expect their country to go fully cashless. In Kenya, of those who believe the country will one day go cashless, the average predicted year is 2033.

Commenting on the poll, Edith Chumba, Standard Chartered head of retail banking said the survey results are supported by Standard Chartered’s ATM withdrawals data, which shows that across the ten surveyed markets, where Standard Chartered offers consumer 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. Today, 89% of transactions are being conducted digitally with a 62% and 90% penetration for our retail and corporate clients respectively. Our digital banking platform which has more than 70 digitally accessible services allows our clients to open an account, transact, buy and sell government securities, invest in some of the most diverse mutual funds across the globe and access an array of insurance products, Chumba said.

Change in spending habits

Meanwhile, as spending begins to creep up as lockdowns ease globally – 49% of respondents in Kenya (46% globally) reported increased spending in July – 93% of Kenyans said the pandemic has made them more careful with their expenditure (75% globally), the highest proportion of any country surveyed.

Reflecting this increased caution, 91% of Kenyan respondents said that the economic impact of COVID-19 has made them more likely to track their spending, with over 80% of Kenyans either using or interested in using budgeting tools or tools that block card-spend over specified limits.

Consumers around the world are now spending more of their money 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. This trend is reflected in Kenya, with consumers seeing a 58% increase in their expenditure on groceries, a 59% increase in spend on digital devices, and a 39% increase in healthcare expenditure.

Meanwhile in Kenya, 80% of respondents say they have spent less on travel/holidays than they did before the pandemic, while 49% have spent less on experiences and 83% have spent less on clothes.

As well as increased caution when it comes to spending, consumers are increasingly conscientious. This is good news for small businesses and those producing locally-made goods, particularly those making and selling sustainably sourced products.

Kenya leads the way globally in increasingly conscientious consumption habits; 81% of Kenyans say they are now more likely to shop locally (57% cent globally), 75% are more likely to shop sustainably (52% globally), and 70% are more likely to support smaller businesses (50% globally).

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