An Unprecedented Season of Spending
India's festive season, from Dussehra and Diwali to Christmas, has always been a period of peak economic activity. This year, however, consumer sentiment is particularly buoyant. Studies indicate a vast majority of consumers plan to spend more than last
year, with fashion, home décor, and electronics topping the list. The excitement is palpable, fuelled by massive online sales events and a cultural imperative to celebrate with gusto. For young Indians—Gen Z and millennials—this period is not just about tradition; it's about aspiration, upgrading lifestyles, and participating in a collective consumption boom. This generation, which already accounts for a huge slice of consumer spending, is at the forefront of this surge.
The New Era of Easy Credit
Unlike previous generations who often saved before spending, many young consumers today have a different financial toolset. Credit is no longer a milestone but an everyday convenience. The rise of fintech has put unprecedented purchasing power into their hands through credit cards and, most notably, Buy Now, Pay Later (BNPL) schemes. These services offer instant, frictionless credit at the point of sale, making big-ticket items seem more affordable by splitting payments into smaller EMIs. For many young people, BNPL is their first taste of credit, with a recent report showing 70% of Gen Z consumers had borrowed before even getting their first credit card.
The Hidden Risks of Instant Gratification
While convenient, this easy access to debt is a double-edged sword. BNPL and credit cards can encourage impulse buying and overspending, creating a dangerous illusion of affordability. A significant number of BNPL users admit to spending more than they can truly afford. The seemingly 'zero-cost' EMIs can come with hidden costs, and late fees can be exorbitant, with interest rates sometimes soaring far higher than traditional credit options. Furthermore, missed payments on these loans are increasingly being reported to credit bureaus, which can damage a young person's credit score and affect their ability to secure larger loans for a house or car in the future.
The Social Media Pressure Cooker
The pressure to spend is amplified by social media. Platforms like Instagram and YouTube are engineered to create aspirational desire, making luxury spending and curated lifestyles feel normal. For a generation that values experiences and social validation, the fear of missing out (FOMO) is a powerful driver of consumption. Influencers, who often have a strong, trust-based connection with their followers, play a key role in shaping purchase decisions, further blurring the line between want and need. This digitally-driven social comparison can push young consumers into a cycle of debt to maintain a lifestyle they see online.
Navigating the Festive Season Wisely
The challenge for young consumers is to enjoy the festivities without falling into a debt trap. Financial experts emphasize the importance of planning and budgeting. Before diving into the sales, create a clear festive budget that outlines all expected expenses, from gifts to outings. Make a shopping list and stick to it to avoid impulse purchases driven by flashy discounts. It's crucial to distinguish between a good deal and an unnecessary expense. If using credit, understand the terms completely. Track your spending across all platforms—credit cards and multiple BNPL apps—to get a true picture of your liabilities. Prioritizing needs over wants and focusing on creating memories rather than accumulating debt is key to a truly happy festive season.
