Festive season has shed reticence of consumers and is fuelling online shopping

With new normal being practiced across all sectors, apprehensions related to online shopping have gone astray and shopping sprees are getting diverted to e-retail platforms. Furthermore, a sharp contraction in economy and loss of numerous jobs has also led consumers to flock online for best bargains.


The onset of festive season which is likely to peak with Diwali has helped consumers to shed their reticence towards online shopping. Consumers now appear cautiously optimistic despite the impact of coronavirus. A report by RedSeer estimates that festive sales this year are expected to touch US$ 7 billion in gross merchandise value (GMV) as compared to US$ 3.8 billion during last year.

With new normal being practiced across all sectors, apprehensions related to online shopping have gone astray and shopping sprees are getting diverted to e-retail platforms. Furthermore, a sharp contraction in economy and loss of numerous jobs has also led consumers to flock online for best bargains. The renowned online shopping platforms Amazon and Flipkart have already joined the bandwagon of festivities through their Great Indian festival (GIF) sale and Big Billion Days (BBD) sales respectively.

Consulting firm RedSeer reveals that Flipkart’s sale has aced Amazon’s festival sale. The total sales grew by 55 per cent year-on-year to $4.1 billion in 2020 from $2.7 billion sales last year. But, it is also expected that sales would not be usual like previous year. A report by BluePi Consulting states that about 60 per cent retail organisations in India have seen their forecasts for the festive season getting decreased by 25 per cent or more. This downturn in festive sales would thus pave a path of longer recovery period.

Manufacturers and retailers plan to leverage all channels

While negative festive forecasts are being pronounced in the apparel retail segment, 57 per cent of non-apparel retailers are interestingly optimistic about no or little change in sales. This is due to fact that consumers are stepping out more frequently after unlocking of malls, shopping complexes, cinema halls, and stores. Forrester report says that around 40 per cent mobility is recovered. Despite bleak forecasts, entire retail chain is geared up for the festive season with hot deals and lucrative discount offers.

Achin Gupta, Country Head – India at ZOOOK, an electronic consumer durable brand tells, “It is a positive sign that we have already entered the unlock phases ahead of the festive season. Shops have opened up, ecommerce platforms are back in action, and manufacturers are returning to the market to compensate for losses. We are already witnessing growth in sales. It is a matter of happiness that people are excited about festivities despite the ongoing pandemic situation.”

Looking forward for an increase in sales in this festive season, Gupta says that he too expects to reach out to maximum prospective customers through online channels. “Though the purchasing power has been reduced and the situation has not been encouraging during the entire 2020, things are returning to normalcy and we expect good growth in the quarter,” he adds.

Earlier, they had leveraged Amazon’s GIF sale and Flipkart’s BBD sale in October and it went well for them. As a result, their company chalked out festive offers to attract consumers which includes discounted prices especially on online channels. Gupta elaborates, “We are making most of our products, especially our high-end innovative audio devices. From outdoor party speakers to indoor party speaker and sound bars, we are making it all available at never-seen-before prices.”

Similarly, Pooja Thakur, Founder and CEO of Praefinio Footwear has set a target of Rs 70 to 80 lakh for sales during the entire festive period of three months. She has also planned some strategic partnerships for this.

She elaborates, “First of all, we have planned to harness local markets and small buyers to create more channels for our already manufactured goods. Owing to the pandemic, we have to give better attention to each segment of customers and offer an appropriate mix for each carefully chosen segment. Secondly, we are managing our production cost-effectively through contractual labour workforce now as most of the salaried labourers have returned to their hometown.”

The festive season of three months usually brought abundant sales and orders for manufacturing community but this year have hit them hard. Thakur further informs, “Even shoe retailers are keen to clear out their inventories during this period. Our sales too had hit badly during the lockdown and now we are expecting a maximum revival till December. The lucrative deals by e-retailers can play a significant part in it.”       

Developers dwell on lucrative offers

Real estate segment which took a massive hit is also hopeful for sales during this festive season. With the housing demand on halt, festivities seem just in due course for real estate developers to attract buyer’s interest and to sell in demand properties. Builders across the country have come up with easy payment plans, sub-vented interest rates, construction allowance, and staggered payment for this.

Niranjan Hiranandani, President of the National Real Estate Development Council (NAREDCO) is of opinion that this festive season will also attract a lot of NRI home buyers either for the end-use or for an investment. This will also uplift the otherwise wilted demand. The Tata Housing Development Company (THDC) recently announced its plan of launching WOW is NOW scheme this festive season in which customers have to pay only 3.99 per cent flat interest rate on their home loan for a period of 1 year.

Tata Housing said that the move has been considered by taking a 7 per cent rate of interest per annum from the bank as the maximum limit for the offer. Further, the company has also created a WOW is NOW Zone on their website. In this, the customer will receive a gift voucher ranging from Rs 25,000 – Rs 8 lakh depending on the property. The scheme will be applicable till November 20.

Similarly, DLF is offering construction allowance and staggered payment alternative among other offers. “Two of the biggest learnings would be promises made must not just be kept but over-delivered to build consumer’s confidence and to increase investment in this asset. Secondly, do not devalue your product, instead offer high value proposition. For instance, instead of offering discounts, we are offering more value in form of construction allowance and staggered payment options etc,” said a DLF spokesperson.

With this enthusiasm, properties shows too would be back during this festive season. Consultancy firm Investors Clinic will be organising a property show during festival season to bring today 15 major developers with an aim to achieve Rs 200-300 crore worth of deals.

High hopes of sales in automobile segment

Healthy rise in automobile month-on-month sales has increased hopes of a steady acceleration in sales. Gradual pickup in last four months shows a sustained increase in both retail sales and wholesale purchases. Consumers shifting to personal mobility and new product launches are some of the main reasons for the surge in demand. Sales of passenger vehicles grew by 9.81 per cent in September.

Auto giants such as Maruti Suzuki, Tata Motors, Mahindra, and Honda expect sales to pick-up further. The automakers have come up with lucrative discount offers in form of pre-booking, cash discounts, exchange offers or corporate discounts. Luxury automobile space too have gone offer offensive. On offer are direct discounts and indirect value added propositions like ‘free insurance’ and ‘service packs’. Accordingly, discounts ranging from 5 to 8.5 per cent on ultra-luxury cars and SUVs are being bestowed.

On a broad range, these discounts depending will range from Rs 2.5 to Rs 8.5 lakh and beyond on the actual price. Apart from discounts, indirect offers such as attractive financing solutions, minimum resale value, free insurance or service warranty from 3 to 5 years and other such provisions are also being served.

Talking about offers, Balbir Singh Dhillon, Head of Audi India says, “This may include a lower rate of interest or a peace of mind package for up to five years. In addition, we are making re-purchase and upgrades easier through special ‘Loyalty and Exchange Programmes’. We have also tied up with banks to provide a low EMI, for customers who wish to buy a pre-owned car through our ‘Audi Approved Plus’ dealerships,” he said in a statement.

Mercedes-Benz India is offering attractive financial packages with Unlock Celebrations campaign for the festive season. Company is offering benefits to customers which include low EMI starting from Rs 39,999 for the C-Class with an ROI of 7.99 per cent and complimentary first year insurance amongst others. Recently, it reported a marked recovery in sales with an off-take of 5,007 units in the period from January to September 2020.

Another luxury auto-maker, BMW Group India is offering Easy Start and BMW 360 which provides exclusive financial packages. Under the ‘Easy Start’ programme, the company is offering up till 40 per cent lower equated monthly installments for first 2.5 years. Further, the offer provides low rate of interest that differs depending on the model. Besides, the luxury auto-maker is also offering Service Inclusive and Service Inclusive Plus which further reduces the cost of ownership.

E-commerce platform flourish with virtual festivities

Pandemic and the digitalisation of commercial and social life have brought tremendous change to consumer behavior in India. From celebrating Holi without colours to Dusshera without going to major congregations, the festive season has also seen a significant organizational and economical transformation. Hence, festivals in 2020 are now a smaller affair with each person celebrating festivals with their families on a smaller and safer level.

Consumers are adapting to digital solutions, shifting to online shopping for gifting or festive goods have become a necessity in many ways. This has given a tremendous boost to e-commerce sales. As per the Forrester forecast, around 5.5 to 6 crore consumers are going to shop online. This will push profits for online retailers up to 34 per cent year-on-year. Smartphones are going to popular purchase choice item followed by consumer electronics and grow at 26 per cent and 43 per cent.

Viewing this, e-commerce startups such as My Pooja Box have pinned high hopes in this festive season. This Delhi-based startup largely focuses on religious products such as home decor, gifting, and festive products. It is positive about sales. Kaveri Sachdev, Co-founder tells, “The numbers have been multiplying every year. Even after losing months of sales due to the lockdown, we are seeing growth of 100 per cent as compared to last year and now we are expecting a turnover of Rs 6 to 7 crores.”

Earlier, festive exhibitions and melas had huge footfall that converted into sales with domestic retailers. But under new norms, fewer social gathering and public celebrations are allowed. This caused shift of demand to online channels. This created a countless alternatives for consumers and hence brand loyalty is a challenge for online space.

Keeping this in mind, Sachdev has brought in new plans. “We have recently launched a new technology on our website called ‘Create A Box’ which has become our USP this year. Create a Box allows the user to select their choice of gift box, select the products and goodies, and add a message with an easy step-by-step functionality on My Pooja Box,” she tells us. Her company’s presence on social media and celebrity customers has also influenced sales as well.

Another Delhi based mobile application start-up, FYOOL views festive days as an opportunity to launch the cashback app and to build its customer base. The start-up offers cash-back on petrol, diesel, CNG along with all types of wine and beer products. Its founder Raunak Sharma says, “We have built this app to reach out to a common middle-class man or a two-wheeler user who needs to buy fuel on a daily basis. We also want to benefit housewives by using the cash-back for grocery items.”

Sharma informs that this app will be launched with an offer of 100 per cent cash-back to the first five hundred users who downloaded it within 24 hours. “We are very optimistic about the launch of this app as there is a significant rise in downloads of it over the last few years. The company anticipates a large number of users to adopt the app. It is also the festive season which creates a perfect environment for the launch of an App like this,” he adds. 

This festive season, online shopping and cashless transactions have also excited companies in this arena. POS Terminal maker and end-to-end digital payment enabler Mswipe is positive that this festive season will serve as the catalyst for small businesses to get back to pre-covid levels. According to Sameer Hoda, President-Strategy & Operations at Mswipe says with businesses reopening their primary focus is to give a helping hand to merchants as they restart their businesses and help them in getting started on the complete range of digital payment modes.

“We have already seen strong recovery with transaction volumes almost matching to pre-covid levels in tier 2-4 locations and we expect metros to follow the suit in coming weeks. This festive season, we also expect the share of digital transactions to increase significantly as merchants are adopting multiple payment modes ranging from cards, Bharat QR, UPI QR, tap and pay, and pay by link. Mswipe is uniquely positioned as the only platform in the country supporting all payments, giving merchants a single settlement that is easy to understand, track and recon,” he says.

This festive season Mswipe is offering Bank Box, a digital acceptance and payment solution to merchants and MSMEs that combines their acquiring and issuing platforms into one-stop-shop. With a one-time digital KYC, businesses can choose between Bank Box Go – a POS solution with zero rentals and zero MDR or Bank Box Lite – a QR solution with 0 rentals and 1 per cent cash-back on all transactions and instantly go live.

Extent of expenditure by consumers

A survey by LocalCircles says that consumers spending will be less as compared to previous season. The spending is likely to drop by one-third due to the pandemic effect. Most of the consumers surveyed were of opinion that they want to buy small traditional items and gift packs online. Around 14 per cent of consumers said that they will spend between Rs 10,000 and Rs 50,000 in the upcoming festive season and 44 per cent said that they would spend between Rs 1,000-10,000.

In addition to this, only 3 per cent said that they will spend more than Rs 50,000 for purchases. According to the survey, consumers will spend money on grocery and food supplies. Among the responders, 19 per cent of consumers would spend on white goods and appliances, 15 per cent on smart-phones and consumer electronics, 11 per cent on home renovation, and 8 per cent on fashion and festive wear. While, another survey by InMobi found that 54 per cent will spend Rs 15,000 on an average during this shopping season. Here is a list of top shopping categories.

Infographic-Expectations from Festive season

However, the fact is every festive season witnesses increased buying in almost all sectors and segments. But this time, we are in the middle of an unprecedented situation. Hence, various kinds of speculations are rife on how this festive season will turn out both for the businesses and consumers. Experts still believe that it would take much more than one festive season for revival of the economy.

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