As the festive season approaches, urban India is poised to enter a shopping frenzy, with total spending projected to reach a staggering US$ 22.12 billion (Rs. 1.85 trillion), according to a recent survey conducted by LocalCircles, a popular online community platform. The survey reveals that nearly 1 in 2 households is planning to spend more than US$ 119.57 (Rs. 10,000) during this year's festive period, reinforcing the nation's robust consumer spending during this crucial period.

The survey, which collected data from over 49,000 households across 342 urban districts, provides detailed insights into urban India's festive spending patterns, highlighting shopping preferences, expenditure categories, and product choices. The responses come from a broad spectrum of cities and towns, with 44% of participants hailing from Tier-I cities, 34% from Tier-II cities, and 22% from Tier-III, IV, and V districts, reflecting the nationwide shopping trend during the festive season.

Breakdown of Spending Patterns: From Modest to Significant Budgets

The LocalCircles survey reveals that households have varied spending capacities, with the majority preparing to make substantial purchases. About 44% of the respondents indicated plans to spend more than US$ 1,195.66 (Rs. 100,000) during the festive season, marking a significant level of consumer expenditure. In contrast, 18% of households plan to spend between US$ 239.13 (Rs. 20,000) and US$ 597.83 (Rs. 50,000), while 26% expect to spend between US$ 119.57 (Rs. 10,000) and US$ 239.13 (Rs. 20,000).

Applying these categories to the approximately 80 million urban households in India suggests that the total festive spending could reach US$ 22.12 billion, contributing to a buoyant retail market as festivals like Diwali, Dussehra, and Navratri approach.

Shopping Preferences: Physical Stores vs. E-Commerce

The survey also sheds light on where consumers intend to spend their money. Despite the growth of e-commerce, 70% of urban households still prefer to shop at physical stores and local markets, underlining the enduring appeal of in-person shopping experiences. Only 13% of the respondents plan to rely on e-commerce platforms for their festive purchases, reflecting a preference for the tangible experience of shopping, where they can physically see, touch, and assess products before making a purchase.

The reasons behind these preferences range from the desire to find better deals in markets, particularly for traditional items like Pooja supplies and festival groceries, to the convenience and immediacy that brick-and-mortar shops offer. This trend contrasts with previous assumptions that online shopping would dominate festive spending, suggesting that many Indian consumers still value the personal experience of visiting local shops during culturally significant festivals.

What Urban India is Buying: Key Categories

When it comes to what people are buying, Pooja/Diwali supplies top the list, with 70% of urban households planning to spend in this category, reflecting the cultural importance of rituals and religious festivities during the season. Additionally, 64% of respondents plan to stock up on festival groceries, ensuring that celebratory meals and feasts remain a highlight of the festive experience.

Beyond traditional categories, there is strong demand in areas like beauty and fashion (38%) and home décor (40%), as families look to refresh their homes and wardrobes in preparation for the holidays. Other notable categories include smartphones and consumer electronics (22%), indicating an appetite for technology upgrades, and white goods and appliances (18%), as many households take advantage of festive discounts to purchase high-value items.

Interestingly, jewellery and automobiles also feature in the festive shopping lists, albeit for a smaller proportion of the population. Around 4% of households plan to invest in new jewellery, and another 4% may purchase vehicles, possibly as part of long-term financial planning or status-driven choices during the festival season.

Factors Influencing Consumer Choices: Budget and Quality Lead the Way

In terms of decision-making, budget and value for money remain the most important factors for consumers during the festive season, with 46% of respondents indicating that their spending choices will be driven primarily by cost considerations. For 43%, the quality of the products they are buying is the most important factor, suggesting that consumers are willing to spend more for high-quality goods during the festive period.

Surprisingly, only 8% cited selection or range as a key factor, while a mere 3% said that convenience would be the most important consideration, underscoring the belief that consumers are primarily focused on securing good deals and high-quality products, even if it means visiting multiple stores or enduring crowded markets.

The Role of Tiered Cities in Festive Spending

The survey highlights interesting regional dynamics in India’s urban festive spending, showing that while Tier-I cities lead in terms of total expenditure, Tier-II and Tier-III, IV, and V districts are increasingly contributing to the national festive shopping landscape. As smaller cities become more economically empowered, their households' disposable income has risen, allowing them to participate in larger-scale shopping during the festive period.

Many respondents from Tier-II and Tier-III cities reported that they are willing to spend significant amounts on home improvements, gadgets, and festive supplies, reflecting a growing convergence in spending habits between metros and smaller cities.

Conclusion: A Buoyant Retail Market for the Festive Season

The findings from the LocalCircles survey paint a positive picture of urban India's retail market during the upcoming festive season. The projected spending of US$ 22.12 billion is set to boost sectors ranging from traditional goods like Pooja supplies and groceries to modern categories such as smartphones and consumer electronics. With 70% of consumers opting to shop in physical stores, the festive period will also likely be a boon for local retailers and market traders, reinforcing the importance of traditional shopping channels in India’s evolving retail landscape.

Urban India's shopping preferences reflect a balance between the modern and the traditional, with households increasingly savvy about value for money but still deeply attached to the cultural significance of buying certain products from local markets. This trend, coupled with increased disposable income and the continued economic recovery, bodes well for retailers as they gear up for what promises to be a busy and lucrative festive season.

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