By Maimun Mustafa
The Consumer Perspective
With a Muslim population of roughly 148 million, the Bangladesh market annually experiences substantial changes in consumer trends starting from Ramadan and culminating in Eid. However, is conspicuous consumption the cause for splurging in the month of self-restraint or are there greater overarching issues that compel individuals’ sporadic spending than in any other period of the year?
Eid means festival bonuses and salaried workers making long queues to cash out at banks. The spending pattern of most individuals are based on the expectation of the eventual payouts before Eid and the shopping sprees are greatly catalyzed by it. Upon receiving of the actual bonuses at the last week of Ramadan, the last few days before Eid observe huge spending sprees. Also there are huge injections of foreign remittance during this period ($1.49 Billion in 2018) and this leads to the increased buying power of the average citizen.
Multiplication in Meals
With the money tunneling deep pockets in people, it also leads to greater spending patterns. Gluttony on food is first on the list. While Ramadan is supposed to be a test of restraint, Muslim consumers tend to spend extravagantly on meals. The total meals remain the average of 3 per day namely, Sehri, Iftar and Dinner. However, imagine a 50% increase per day on Iftar meals only. Whether it is spent on homemade fried snacks or around a restaurant table the expenditure leads to the huge demand pushing inflation when you multiply that number by the 160 million and counting. With more and more food offers coupled with higher prices for essentials in the grocery markets, price levels spiral out of control than any time of the year. Yes, in terms of utility for variety of choice it gives many options. More buy one get one (or two) offers these days allow many to take advantage of the costlier hostels of food dugouts that maybe would not be possible for the middle income earner to share with close ones. Additionally, the discounts and offers are no more only limited to the exclusive few cardholders as mobile operators and portable wallets are bringing exclusive discounts for their users as well.
The Ultimate Choice
More than ever, Ramadan compels brands to fight for the market of the same product as well as the market of all products in the same spend bracket. To clarify imagine that a person has BDT 1000. Now the choices with the amount revolve around a clothing item, an iftar meal, a mobile recharge or going to watch a movie with a friend. Imagine all of those market players vying for that coveted cash from every person. This results in increased choice, the ability to negotiate and thus tremendous utility for the consumer. Nevertheless, with fierce competition comes fiercer marketing and social media feeds get congested with targeted ads as do SMS offer bombardment. This cluttering of excess information may be tiresome on the targeted individual especially after a day of fasting and praying at night. With the giving of ‘salami’ or ‘eidi’ on Eid day, younger consumers receiving cash gifts from their elders also have more purchasing power during the vacations.
So there are two burning issues to look at under this umbrella. First the intra region issues during Ramadan and the inter region problem when commuting. Firstly, let’s understand that a BDT 5 to 10 increase to a BDT 10 fare results in a 50% to a 100% increase in a rickshaw or bus ride. If everyone starts increasing the price, an exponential rise hits the consumers deep in their wallets. Furthermore, the market for intra district transport prior to Eid lead to black markets and excess fares. Overall the consumers’ pockets become drained and the process for obtaining tickets become difficult in itself. In addition, those willing to take vacations out of Bangladesh need to book in advance in light of high demand although special tour offers can come to the rescue.
Internet Use Influx
This season may also lead to increases in spending for consumers online. A lot of the time people do not have access to the internet at home because of mobility or as a result of regular malfunction. Ramadan restaurant and fashion selfies spread like wildfire. Also for many NRBs time zone differences lead to those awkward calls from their in country counterparts. While on the go or in supermarkets, when it comes to communicating choices with family friends’ social platforms come as the solution at hand. However, who supplies the internet when Wi-Fi isn’t available. Mobile data is the key for people on the go and hence the spending on data packages rise. Additionally, with more online shop availability tech-savvy consumers with limited time take advantage of Eid sales.
Eid brings with it great spending opportunities. However, with great offers come great responsibility: Spend wisely.