As consumer confidence hits record lows, Indians are spending with great caution this festive season.
The spending intent among urban Indians during this year’s festival season is below average, according to a survey by YouGov, a UK-based online market research firm. The festival season began with Navratri on Oct. 17 and will end with Diwali on Nov. 14.
YouGov’s Diwali Spending Index is a weighted impact of 10 factors, including household expenses, intent to invest or splurge, and general optimism towards the economy.
The lockdowns because of Covid-19 dealt a major blow to the Indian economy, which contracted 23.9% in the quarter-ended June. The hope was that the festive season would revive the economy as spending increases. But most urban Indians have said that they are likely to spend less money this Diwali than 2019.
Despite this depressed spending behaviour, though, there are certain categories of consumer goods that are going to top the shopping list during the festive season sales.
India’s craze for smartphones has sustained even during the economic gloom.
Among gadgets, which emerge as a clear priority, consumers have indicated a strong desire to buy smartphones, laptops, and wireless headphones, likely driven by work-from-home and online education.
Indians, who have mostly relied on inexpensive domestic labour, have also begun thinking about electronics like dishwashers and upgrading their kitchen devices. Quartz had reported how the pandemic was driving up dishwasher sales in a country that never widely adopted that gadget.
The pandemic has also caused a shift in how Indians shop. A large number of urban Indians are thinking of making their Diwali purchases through e-commerce platforms. Over 50% of survey respondents indicated that they would want to make their Diwali purchases online. India’s largest e-commerce platforms like Snapdeal, Walmart-owned Flipkart, and Amazon India host annual sales during this period.
But the move to online is also driven by gadgets. For big-ticket products such as jewellery and furniture, 61% and 55% of Indians, respectively, have said they prefer buying these from offline stores.