From investing in experience, to using AI as a shopping guide – India’s changing Diwali expenditure patterns

• This festive season witnessed a substantial 40% rise in dining out experiences.
  
• Leading up to Diwali, there has been a 137% increase in jewellery sales.
  
• 99% of respondents acknowledged the utility of AI in shopping experiences.
  

Diwali is possibly the biggest festival in India and expenditures rise for every household around this time as people indulge in gift shopping as well as other planned activities.

The Diwali Trends Report by Razorpay, a payments solutions provider, which focuses on purchasing trends and patterns of two months leading up to Diwali in 2022 and 2023, reveals some interesting insights.

Dining out gets a new meaning

Enhancing the festive spirit, indulging in dining out and relishing culinary adventures have become a part of seasonal traditions. This surge in the 'dine and delight' trend resulted in a 48% surge in restaurant transactions in 2023, indicating the rise of dining out during Diwali. This festive season witnessed a substantial 40% rise in dining out experiences.

Health is wealth

Indians have taken their self-love and self-care to a new level by investing in themselves like never before. It wasn’t just about indulging in tempting sweets and flavorful snacks; there was a notable focus on physical health and dietary wellness.

Indians have adopted a healthier lifestyle, resulting in a 137% surge in dietitian consultations and a 42% boost in fitness equipment sales. A significant 20% of all expenditures on fitness and dietitians in 2023 occurred during the festive season.

Shifts in shopping habits and AI adoption

Initiating their gift searches predominantly through online ads (33%) and brand websites/apps (31%), closely followed by physical stores (28%), shoppers expressed their evolving preferences. Additionally, 99% of respondents acknowledged the utility of AI in shopping experiences.

Key uses included finding the best price for a product (44%), discovering gift ideas (43%), and seeking information about found products (39%). This data underscores AI's significance in shaping the future of retail, emphasising the need for businesses to leverage AI technologies for a more seamless and personalised shopping journey.

Fashion and jewellery have new takers

Although Diwali celebrations may have witnessed some changes, the essence of this festive period remained deeply rooted in India's rich culture and traditions.

There has been a surge in sales: a 137% increase in jewellery sales, a 32% uptick in sales for fashion and lifestyle brands, and a 56% increase in sales for women’s clothing during the 2023 festive season.

A Diwali of experiences

Rather than focusing solely on shopping extravaganzas, Indians diverted their investments towards exploring new destinations, signalling a desire for experiences.

In its transformed form, Diwali has evolved into a festival of travel, evident in a twofold increase in expenditures on flight tickets and a 35% increase in spending on holiday accommodations.

Says Rahul Kothari, Chief Operating Officer, Razorpay said, “ It is a remarkable feat to see how Indians have widened their horizons from investing solely in physical goods to now also investing in gaining immersive and invaluable experiences.”

Sales suge during Diwali

Insights released by Criteo, the commerce media company, on online retails sales, traffic, consumer behaviour and preferences during Diwali 2023 also shows some interesting trends.

The pivotal deal days from October 8th to 15th had a major impact, driving a 26% increase in sales and an 8% surge in website traffic compared to the September 17th to 30th average. Diwali served as a major catalyst, witnessing a 72% surge in online sales on November 10th, just before the festival.

The two-week run-up to Diwali (October 29th to November 11th) showcased impressive statistics, with a 49% average sales increase, a 35% traffic surge, and up to a 22% rise in conversion rates. Notably, in contrast to the same pre-Diwali period in 2022, online retail sales soared by a substantial 39% in 2023.

Consumer behaviour and shopping trends

Early preparation for the holiday season was evident as consumers engaged in product exploration approximately 18.3 days prior to making purchases during the peak period. From July to September 2023, a considerable 74% of holiday shoppers had already considered their gift choices, and over 50% had made holiday purchases.

Intentions to spend more were prevalent, with more than a third of shoppers indicating they would spend "much more" than the previous year, both in physical stores and online.

Says Taranjeet Singh, Managing Director, Enterprise, APAC, Criteo, “According to Criteo, 34% of shoppers who were new buyers during the two weeks approaching 2022 Diwali made at least one additional purchase from the same retailer between November 2022 and March 2023, showcasing the possibility of acquiring new customers and turning them into repeat customers during this season.”