September 26, 2024, New Delhi: The festival season begins soon in India and it is the period when many urban households in the country spend on buying festival supplies, gourmet foods, gifts for friends and family, fashion, appliances, whitegoods, consumer electronics, precious metals like gold & silver, automobile and even real estate.

While for majority of the urban households in India during the festive season, the primary way to shop during the festive season has always been visiting markets and stores, shopping online during festivals has also gained traction over the last decade, especially for those in metros. With the large festive sales held by online platforms, products in categories like consumer electronics, whitegoods, appliances and fashion sell online in high volumes and lately with arrival of fast delivery platforms, many metro and tier 2 households tend to purchase their last minute gifts or packaged foods online as well.

This year, retailers including dealers of automobiles, whitegoods, consumer electronics, etc., are banking on a revival of consumer spirit despite the latest bi-monthly consumer confidence survey (CCS) report by the Reserve Bank of India (RBI) showing that in July consumer confidence in India had declined for the second consecutive survey round, reversing a prolonged upward trend seen in the post-Covid period. The survey revealed that household expectations on major parameters, except for spending, have moderated. Consequently, the current situation index (CSI) dropped to 93.9 in July 2024, down from 97.1 two months earlier. While households remain optimistic about economic conditions for the coming year, this optimism has waned compared to the previous survey round.

LocalCircles through an Urban India survey has sought to find out the pulse of the household consumer on festival season shopping to understand whether they are likely to shop this year and how much do they plan to spend. If so, what is going to be their primary mode of shopping i.e. visiting local markets/stores or online. It has also attempted to understand what is on their shopping list. The survey received over 49,000 responses from prospective car buyers located in 342 districts of India. 61% respondents were men while 39% respondents were women. 44% respondents were from tier 1, 34% from tier 2 and 22% respondents were from tier 3, 4, and 5 districts.

1 in 2 urban Indian households surveyed will spend over INR 10,000 this festive season

For an average family, household budget and savings generally determine how much they spend on festive occasions. The survey started out by asked urban household consumers, “As a household, how much are you spending / plan to spend during this festive season (spending beyond your regular monthly spending)?” The question received 12,008 responses with 4% stating “INR 100,000 or more”; 4% stating “between INR 50,000 – 100,000”; 18% stating "between INR 20,00-50,000”; 26% stating "between INR 10,000- 20,000”; 14% stating "between INR 5,000 – 10,000”; 8% stating “up to INR 2,000”; and 26% of respondents stating, “don’t plan to spend anything this festive season”. To sum up, 1 in 2 urban Indian households surveyed will spend over INR 10,000 this festive season. India has approximately 80 million urban households and if averages of the above categories are applied to them, Urban India is likely to spend INR 1.85 lakh crores or $22 billion during festive season 2024.

Getting Value for Money most important criteria for urban Indian households during 2024 festive shopping

The next question in the survey focused on what matters to the urban household consumers this year. It asked, “What among the following is most important to you when shopping/ spending during this festive season?” Out of 12,249 responses to the question 46% stated “budget/ value”; 43% stated “quality of products”; 8% stated “selection or range”; and 3% stated "convenience”. To sum up, getting Value for Money is the most important criteria for urban Indian households during 2024 festive shopping. In 2020 and 2021, during the Covid period safety and convenience were top priorities for most households while this year it is clearly value for money followed by product quality.

70% urban Indian households shopping this festive season likely to use stores/ markets as primary channel while 13% likely to use eCommerce

With shopping online becoming mainstream in urban India post the pandemic, the survey next attempted to understand what is going to be the primary channel of shopping for households. It asked the urban Indian consumers, “How are you buying/ plan to buy majority of the items you need for this festive season?" The question received 11,710 responses with 70% stating that they “would like to visit the mall, retail stores, local markets and buy”; 13% stated that they “would like to place orders via ecommerce/ online sites/ apps”; 5% stated that they “would like to have the stores to have their catalogue online and order for delivery via phone/ WhatsApp”; 6% stated that they “have some other channels for buying” and 6% of respondents did not give a clear answer. To sum up, 70% urban Indian households shopping this festive season likely to use stores/ markets as primary channel while 13% are likely to use eCommerce as their primary channel. It must be noted that while 13% are likely to do majority of their festival shopping online this year, 40-50% urban households may end up buying online in categories like consumer electronics or fashion, especially as platforms roll out promotional offers. Per LocalCircles estimates, India has nearly 40 crore unique registered shoppers who at some point have placed an order online in the last decade.

7 in 10 urban Indian households likely to spend on pooja supplies and festival groceries this festive season; 40% also spending on home decor while 38% spending on beauty and fashion

Festive buying range is very wide as it can include things like decoration items to utility products to luxury goods. Even gold jewellery can be part of festive shopping. The survey next asked urban consumers, “What are all the categories in which your household is making / likely to make purchases this festive season?” Some among 12,970 who responded to the question indicated more than one option. 70% indicated “pooja/ Diwali supplies (diyas, lamps, candles, lighting, flowers, etc.); 64% indicated “festival grocery (gift packs, gourmet, foods, dry fruits, fruits, chocolates, traditional sweets, etc.)”; 40% indicated “home décor (furniture, decorative, furnishings, paints, sanitaryware, lighting, etc.); 38% indicated “beauty and fashion (apparel, cosmetics, shoes, bags, etc.); 22% indicated smartphones and consumer electronics (mobile phone, tablet, laptop, printers, router, television and all other electronics, etc.); 18% indicated “white goods and appliances (AC, heater, vacuum cleaner, fridge, air purifier, etc.); 4% indicated “automobile (car, bike, scooter, etc.); 4% indicated “jewellery (diamond, gold, silver, etc.); and 4% of respondents did not give a clear answer. To sum up, pooja supplies and festival groceries are to be the top favourites with nearly 7 in 10 urban Indian households spending on them this festive season; 40% of them are also spending on home decor and 38% are going to be also spending on beauty and fashion.

In summary, 1 in 2 urban Indian households surveyed indicated that they plan to spend over INR 10,000 this festive season with 4% of them likely to spend over INR 100,000. If the average spending by category is applied to the total number of urban Indian households, LocalCircles estimates the total festival spending in urban India to be approximately 1.85 lakh crores or USD 22 billion.

During festive shopping 2024, getting Value for Money will be the most important criteria for urban Indian households besides quality of products. Interestingly, while online shopping continues to grow and nearly 40-50% urban Indian shoppers expected to make one or more of their purchases online, the survey revealed that 70% urban Indian households shopping this festive season are likely to use stores/ markets as primary channel and 13% of them are likely to use eCommerce as the primary channel for shopping. Among the festive shopping, pooja supplies and festival groceries are to be top areas of spending with 70% urban households spending in this category. 40% of these households are also planning to spend on home decor and 38% are planning to spend on beauty and fashion. Approximately 22% are likely to spend on consumer electronics and 18% on whitegoods and appliances.

With the July 2024 LocalCircles survey on household earnings and savings finding that nearly 50% Indian households are undergoing a squeeze, LocalCircles estimates that the total annual festival spending when including rural India spending will likely stay under USD 32 billion making the total spending similar to past years instead of showing year over year growth.

Survey Demographics

The survey received over 49,000 responses from prospective car buyers located in 342 urban districts of India. 61% respondents were men while 39% respondents were women. 44% respondents were from tier 1, 34% from tier 2 and 22% respondents were from tier 3, 4 and 5 districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.