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As India approaches the festive season of 2024, urban households are gearing up for substantial spending, with many families planning to shell out over Rs 10,000. According to a recent survey by community platform Local Circles, total spending during this period is projected to hit Rs 1.85 trillion.
While e-commerce continues to grow, the majority of urban consumers still prefer traditional retail outlets.
Spending Plans for the Festive Season
The survey, which gathered responses from over 49,000 households across 342 urban districts, provides an in-depth look at spending trends.
Key findings show: • 40% of households plan to invest in home decor.
- 38% will focus on beauty and fashion purchases.
- 22% are eyeing gadgets.
- 18% plan to buy whitegoods, such as refrigerators and air purifiers.
Additionally, spending on pooja supplies and festival groceries will dominate many household budgets, reflecting the importance of traditional rituals and gatherings during the festive season.
Preference for Local Stores Despite E-commerce Growth
Despite the rise of online platforms, 70% of urban households plan to shop at local markets and retail stores, with only 13% opting for e-commerce platforms. The survey reveals that fast delivery options have made last-minute online purchases more accessible, particularly in metro and Tier-2 cities.
However, the preference for in-person shopping remains strong, especially for items such as automobiles, consumer electronics, and whitegoods.
Will the Festive Season Overcome Consumer Confidence Concerns?
Retailers are optimistic about the festive season, despite a decline in consumer confidence as reported by the Reserve Bank of India’s (RBI) July 2024 survey. The Current Situation Index (CSI), which measures household optimism, fell to 93.9 in July, down from 97.1 in May. However, festive spirit is expected to boost sales, especially in essential categories like groceries and pooja supplies.
Household budgets will significantly influence spending decisions, with value for money cited as the top priority by 46% of respondents, while 43% place emphasis on product quality. Only 8% consider the range of selection important, and a mere 3% prioritize convenience.
Spending Breakdown: How Much Will Urban Households Shell Out?
The survey also explored the amount households expect to spend beyond their usual monthly expenses.
Among the 12,008 households surveyed: • 4% plan to spend Rs 1 lakh or more.
- 4% will spend between Rs 50,000 and Rs 1 lakh.
- 18% plan to spend between Rs 20,000 and Rs 50,000.
- 26% expect to spend Rs 10,000 to Rs 20,000.
- 14% will spend between Rs 5,000 and Rs 10,000.
- 8% will spend up to Rs 2,000.
- 26% don’t plan to spend anything this festive season.
What Will People Buy?
The survey reveals that festive shopping spans a wide variety of categories.
Among the highlights: • 64% will buy festival groceries like dry fruits and sweets.
- 40% plan to invest in home decor.
- 38% will shop for beauty and fashion items.
- 22% plan to buy consumer electronics.
- 18% will invest in whitegoods.
- 4% are considering big-ticket items like automobiles or jewelry.
Though online shopping will account for only 13% of total purchases, 40-50% of households are likely to buy electronics or fashion items through e-commerce platforms, attracted by promotional discounts. The report estimates India has nearly 400 million unique registered online shoppers.
As the festive season unfolds, both traditional retailers and e-commerce platforms are poised to capitalize on the shopping spree, hoping to tap into the nation’s spending power.
