What consumers will buy this festival season

The most awaited period for Indian consumer goods manufacturer is here — the festival season that begins around Navratri and ends with the New Year. With Indian households doing a large chunk of their expenditure on apparels, consumer durables, autos, homes and home accessories around this time, companies have also tried to do their bit in luring customers with lucrative discounts and offers.

The Covid-19 pandemic is, however, likely to have made a big difference to the customer behaviour this year. This is likely to be manifested in two ways. One, larger chunk of purchases could shift online due to the fear of getting the infection, keeping people away from the brick and mortar stores. The bumper response received by Amazon Great Indian Festival and Flipkart’s Big Billion Days Sales, which witnessed 70 per cent increase in new shoppers so far, underlines this trend.

“We are expecting a minimum of 3 to 4X jump in orders this year; 45 per cent of buyers to our site were from non-metro cities, indicating the rapidly growing trend of users from smaller cities shopping online. Categories like home appliances, mobiles phones, laptops & desktops and beauty & personal care have been top gainers so far,” says Rohan Bhargava, Co-founder, CashKaro & Earnkaro.

Two, the pay-cuts, job losses and economic uncertainty is likely to result in much lower spends this year. Experts corroborate that average spends per person in online shopping is likely to be at least 13 per cent lower this year.

What will they buy?

BusinessLine tries to feel the pulse of the consumers through a survey designed to gauge their mood this festival season. Here are the key findings of the survey:

Electronic goods, including mobile phones, laptops etc, topped the buying list with 29 per cent of the respondents planning to spend on these. Home appliances including TV, washing machines, that consumers typically buy during this period also received 25 per cent of the votes. The unlocking of the economy and life getting back to normalcy is evident in around 23 per cent of the respondents planning to spend on apparels. Gold, surprising had very few takers, only 7 per cent of those who took the survey.

Almost half of the respondents plan to buy online through Amazon, Flipkart etc for this year’s festivals. 38 per cent plan to go to local retail stores and 14 per cent plan to go to company websites to scout for offers. However, it needs to be borne in mind that since the survey was conducted online, most of the respondents are likely to be tech savvy urbanites and hence the answer is not surprising.

The budgets of most respondents, around 37 per cent, was fairly decent, between ₹10,000 and ₹50,000. This seems to imply that consumers are planning to spend on festival shopping despite the pandemic and the economic gloom. Those wishing to spend less that ₹5,000 were 27 per cent of the respondents, who could be the single employed people, who have to spend on themselves alone.

Chennai and Bengaluru received more responses compared to the Delhi or Mumbai. The profession of those taking the survey was also diversified across banking, IT and software, STEM and business.

RBI’s survey findings

The RBI’s consumer confidence survey of households however shows that consumers are not feeling too upbeat about spending on non-essential goods, for now. Towards the end of September, 21 per cent of those surveyed felt that overall expenditure has decreased. But the good news is that 65 per cent of respondents felt that expenditure level will improve after a year.

The decrease in expenditure has not impacted essential items with 61 per cent of the respondents saying that their spend on essential items has increased this year. This is in line with the trend of consumption of essential items increasing during the lockdown period.

However, 60 per cent of those surveyed said that expenditure on non-essential items has decreased this year. Companies will be hoping that this trend does not mar the festival sales.

(With inputs from Surabhi and Annapurani V)

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