Urban Indian households likely to spend close to Rs 2 lakh crore in shopping for this festive season: Survey

40 percent Indian households will spend on home decor this festive seasons. Image: Getty Images

There’s no doubt about the fact that Indians love shopping. And, most of all, festive shopping. The festival season in India is approaching, and is the time when many urban households typically invest in festival supplies, gourmet foods, gifts for friends and family, fashion items, appliances, consumer electronics, precious metals like gold and silver, automobiles, and even real estate.

While most urban households traditionally shop in markets and stores during this time, online shopping has gained popularity over the past decade, especially among those in metropolitan areas. Online platforms like Amazon and Flipkart have also released dates of their big annual sales—Amazon Great Indian Festival and Flipkart Big Billion Days around the same time in early October. Recently, the rise of quick commerce has also led many metro and tier-2 households to order last-minute gifts and packaged foods online as well.

This year, retailers, including dealers of automobiles, whitegoods, and consumer electronics, are hopeful of a revival in consumer spending. However, a recent bi-monthly consumer confidence survey (CCS) from the Reserve Bank of India (RBI) indicated that consumer confidence in India has declined for the second consecutive survey, reversing the upward trend seen after the Covid-19 pandemic. The survey showed that household expectations for major parameters, except for spending, have softened, with the current situation index (CSI) falling to 93.9 in July 2024, down from 97.1 two months earlier. While households are still optimistic about the economy over the coming year, this optimism has decreased compared to the previous survey.

LocalCircles, an online survey platform, conducted an urban India survey to gauge household consumer sentiment regarding festival shopping, in order to understand whether households plan to shop this year, how much they intend to spend, and whether they prefer shopping at local markets or online. The survey, which included responses from 49,000 respondents across 342 distributors in India, also sought to determine what items are on the shopping lists of the respondents.

For an average family, household budget and savings typically dictate spending during festive occasions. According to the survey report, one in two urban Indian households plans to spend over Rs10,000 this festive season. With approximately 80 million urban households in India, applying these averages suggests that urban India could spend around Rs1.85 lakh crore, or $22 billion, during the 2024 festive season.

The survey also highlights what is important to Indian consumers when shopping, and the responses indicate that value for money is the top priority for festive shopping in 2024, followed closely by product quality.

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While e-commerce and quick commerce are growing, the survey reveals that 70 percent of urban Indian households will primarily shop at stores and markets this festive season, with only 13 percent opting for e-commerce as their main channel.

Lastly, the survey identifies what consumers are likely to spend on this year. Pooja supplies and festival groceries rank highest, with nearly seven in 10 urban Indian households planning to purchase these items. Additionally, 40 percent will spend on home decor, and 38 percent will invest in beauty and fashion.