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Lighting up the economy: How Diwali brightens business

Upstox
By Upstox News Desk

2 min read | Updated on November 01, 2024, 12:20 IST

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SUMMARY

~₹4.25 lakh crore is the expected spend this Diwali! To put this in perspective, this is almost equal to annual spend on weddings! Diwali isn't just a festival of lights; it's a major boost for India’s economy, driving an incredible surge in consumer spending. From premium purchases to traditional items, this year, Indians are expected to hit record-breaking spending levels. Read to find out the impact of Diwali on Indian spending and what Indians are looking to buy

Diwali spend is expected to reach an all-time high this year at ₹4.3 lakh crore

Diwali spend is expected to reach an all-time high this year at ₹4.3 lakh crore

Indians are anticipated to spend around ₹4.25 lakh crore this Diwali, according to Confederation of All India Traders (CAIT) estimates. This is the highest festive spending in India’s history, signifying a tenfold growth from 2019.

This massive outlay aligns Diwali spending with what Indians spend annually on weddings—a staggering comparison that emphasizes the economic weight of this festival.

How much do Indians spend on Diwali?

From ₹0.5 lakh crore in 2019 to an expected ₹4.25 lakh crore in 2024, Diwali spending has seen exponential growth.

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Diwali versus other ocassions: Business impact

While Diwali spending stands at an impressive ₹4.25 lakh crore, other festivals like Holi and Rakhi see significantly lower expenditure

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E-commerce's role in festive shopping

The shift to online shopping has driven e-commerce gross merchandise value (GMV) upward during the festive season, growing from ₹35,000 crore in 2019 to a projected ₹1.2 lakh crore in 2024. This trend underscores how platforms like Amazon, and Flipkart, contribute to India’s festive buying spree through big sales events.

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Emerging trends in Diwali 2024 spending

  • 36% of consumers plan to spend more this Diwali, according to a Rediffusion report

  • Secular growth: Below are some of the key categories that are expected to benefit from increased Diwali spending. The chart below lists the expected growth rate in these categories, per a Redseer report.

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  • Quick commerce firms which have been riding the festive bandwagon with expanding into new geographies and categories are expected to see 70-80% YoY growth as per Inc 42 report.

  • What Indians buy most during festive season: Mobile purchases are expected to dominate e-commerce with a ~30% share, followed by fashion at 25% and electronics at 20%.

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  • Digital payment transactions are expected to gain from strong tailwinds with the onset of the festive season, marked by mega e-commerce sales and rising demand from smaller towns and cities as per an RBI report.

Conclusion

As Diwali approaches, India is set to witness record-breaking spending, bolstered by digital payments and online shopping.

Key question to ponder remains - Is this only a temporary spurt or will this festive season set in motion renewed demand across the country?

Disclaimer: This article is for informational purposes only and must not be considered investment advice. Investors should consult with experts before making any investment decisions.

About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

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