Urban India's festive spending pegged at ₹1.85 lakh cr this year

Total festive spending in urban India is estimated to be approximately ₹1.85 lakh crore or $22 billion, according to a survey conducted by community social media platform LocalCircles. One out of every two Indian households is expected to spend more than ₹10,000 during the upcoming festive season. The survey also highlights that only 13% of respondents plan to use e-commerce for shopping, while 70% of shoppers would prefer purchasing from physical stores and markets over online platforms.

The survey gathers responses from 49,000 households across 342 urban districts in India, with 44% of participants from Tier-I cities, 34% from Tier-II cities, and 22% from Tier-III, IV, and V areas. The survey reveals a gender distribution of 61% men and 39% women among the respondents. Out of the total respondents, 50% plan to spend over ₹10,000.

Despite an estimated total spending of ₹1.85 lakh crore in urban India, the report indicated this year’s spending might be subdued compared to two years ago, when higher demand drove up expenditures.

By July 2024, nearly half of Indian households reported experiencing financial pressure, and total festival spending, including rural areas, is predicted to remain close to $32 billion, mirroring previous years rather than growing year-over-year, the survey notes.

With the festive season approaching, e-commerce platforms have launched major sales, such as Amazon’s Great Indian Sale and Flipkart’s Big Billion Day Sale.

The survey reveals that when it comes to shopping preferences, 70% of shoppers are focused on 'puja' and festival groceries, followed by home decor at 40%, beauty and fashion at 38%, and consumer electronics. Retailers, particularly in sectors like automobiles, white goods, and electronics, remain hopeful for a consumer revival, despite the Reserve Bank of India’s latest consumer confidence survey showing a dip in sentiment for the second consecutive round.

“While households remain optimistic about economic conditions for the coming year, this optimism has waned compared to the previous survey round.”

LocalCircles emphasises that budget and value continue to be the primary factors influencing people’s purchasing decisions during the festive period.

In July, PwC's 'Voice of the Consumer Survey 2024,' which surveyed 1,000 consumers, found that 58% preferred shopping through social media platforms, yet 76% expressed concerns about privacy and data sharing on these platforms.