Overall Spending Shows Cautious Optimism
This festive season, stretching from Navratri to Diwali, is projected to be a mixed bag. While the Confederation of All India Traders (CAIT) forecasts a record-breaking trade of over ₹7 lakh crore, a notable 15-18% increase from last year's ₹6.05 lakh crore, consumer
surveys suggest a more nuanced reality. One survey from YouGov indicates that while only 14% of consumers plan to spend more than last year, a significant 26% intend to stick to their budget but shop smarter, and 23% plan to cut back on non-essentials. Another survey by LocalCircles projects a 6% dip in total festive spending by urban households, down to ₹1.97 lakh crore from ₹2.10 lakh crore in 2025. This suggests that while the overall market is growing, individual households are becoming more deliberate and value-conscious in their spending decisions, likely influenced by rising inflation.
The Digital Rupee Goes Further
The divide between online and offline retail continues to define the festive landscape. While traditional markets still account for the lion's share of sales, the growth story is increasingly digital. Online festive sales are forecast to grow by a staggering 25-29% in 2026, potentially reaching ₹1.55 lakh crore. This boom is powered not by metros alone, but by a surge in demand from Tier-2 and Tier-3 cities. E-commerce giants like Amazon and Flipkart reported that over 60% of their initial festive demand came from non-metro markets, with a significant rise in first-time shoppers. An interesting trend within online retail is the explosive growth of quick commerce, which is expected to see its share of festive GMV rise to nearly 16%, driven by impulse buys and top-ups for groceries and gifting.
Category Winners: Practicality Over Pure Luxury
So, what's filling the great Indian shopping cart? This year, the data reveals a clear preference for practical and personal categories. Clothing, footwear, and accessories remain the top priority, with 72% of surveyed households planning to spend in this area. However, the real growth online is shifting away from the traditional dominance of electronics. This year, groceries are set to see a 48-50% growth in online festive sales, with beauty and personal care not far behind at 35-40%. In contrast, some big-ticket items are seeing more cautious behaviour. Jewellery purchases, for example, are planned by only 6% of urban households, with many consumers opting for smaller items like gold coins or exchanging old jewellery to manage costs amidst high prices. Even in electronics, the growth is being driven by premium smartphones in smaller cities, often facilitated by EMI options.
A New Kind of Consumer Emerges
Beyond the numbers, the data points to a deeper evolution in the Indian middle_class shopper. This consumer is more discerning, balancing tradition with modern sensibilities. For Gen Z, for instance, the festive basket is becoming more personal, with nearly a third buying gifts for themselves alongside family. There's also a growing emphasis on value and utility. Surveys show shoppers are paying closer attention to price and quality, a trend visible in the caution around dining out versus spending on groceries for home celebrations. This 'smarter' shopping behaviour is not about skipping the festivities but re_evaluating how to get the most value, whether by finding the best deal online, restyling an old outfit, or prioritizing healthy snacks amid the festive indulgence.
