While most Indian consumers don’t expect household spending to return to normal until the middle of next year, many have expressed a ‘positive buying sentiment’ for this year’s Diwali.
The Diwali 2020 Buying Propensity Report, from insights and analytics company TRA Research, is based on consumer research conducted across 16 cities with 503 consumer-influencer respondents during June and July.
This found that 65% of those surveyed had positive sentiments around buying for the upcoming festival (TRA’s ‘buying propensity’ is based on a combination of an individual’s need-based buying and desire-based buying); a further 28% were neutral and just 7% felt that buying sentiment would be worse than in the current period.
So the immediate outlook appears relatively promising, but TRA puts the figures in context: household spending fell 12.3% from February to mid-June and “the upward climb of the recovery till Diwali 2020 seems to regain at least half of that with a net gain of 6.8%”. Diwali spending this year, it adds, “is likely to see 5.1% lesser spends than the previous one”.
Inevitably, given the current circumstances, any spending is likely to be carefully considered and TRA has also charted differences between what consumers “are keen to buy” and what they “are really going to buy”.
The highest priority areas – where desire and intent come together – include mobile phones and consumer electronics (washing machines, fridges, air conditioners), staples of festival buying. But, perhaps reflecting more straitened times, apparel is far and away the biggest winner, with a more than 3x higher Priority than the average of all other categories. Two-wheelers are also a very high priority.
Second-tier priorities include TVs, home furniture – a reflection of the need to work from home perhaps – and jewellery. “With wedding season coming up and margins on gold loans going down, the consumer appetite for this category is likely to be high this Diwali,” TRA notes.
A third tier, where buying keenness is high but the category isn’t necessarily seen as a planned purchase for this period, brings in personal accessories, cars, laptops and kitchen items.
The low-priority fourth tier includes – no surprise – travel, but also health insurance, which may reflect the tendency everywhere to put off such purchases; or it may be that consumers prefer not to spend money during a festival on something they hope never to have to use.
In terms of where people intend to shop for Diwali, online will get the biggest boost (scoring 260 on TRA’s preferred outlet index), followed by kirana stores (172). The only outlet format in negative territory is malls (-55).
Sourced from TRA; additional content by WARC staff