Travel over jewellery and eating out over expensive clothes are what Indian consumers chose this Diwali season as spending skewed towards small-ticket, short-term utility goods rather than expensive ones, preliminary data from banks and payment processing companies showed. Payment processing company World line, which has a network of about 1 million point-of-sale terminals across India, said overall during Diwali, the company saw a 12 per cent increase in the number of transactions and 15 per cent increase in value of transactions.
However, consumers preferred groceries and restaurants to apparel as average spending for groceries and restaurants increased by 11 per cent and 32 per cent, respectively compared to a 12 per cent dip in apparel spending. The rise in the price of jewellery dissuaded consumers from shopping big, preferring small-token purchases. World line said average spending dipped 66 per cent to Rs 3,625 as gold prices increased to Rs 38,434 per 10 gm. from Rs 31,804 per 10 gm. in 2018.
World line said average spending dipped 66 per cent to Rs 3,625 as gold prices increased to Rs 38,434 per 10 gm. from Rs 31,804 per 10 gm. in 2018.
Though jewellery spending was flat, banks like Axis Bank saw an increase in the total value of purchases in electronics and travel during the festive season. Axis saw a 100 per cent increase in electronics purchases through their online and offline network and a 60 per cent increase in travel booking, which included hotels this festive season versus the same period last year.’ “Muted growth in jewellery reflects the rise in prices. Also, at a consumer level, there is also a change in consumption pattern reflecting in the festive season as people do not want to buy homes and cars but want to spend more on travel and food. This is an early trend but very visible now,” said an executive from Axis Bank. He did not want to be named because the data is preliminary.
HDFC Bank, which is in the midst of its ‘Festive Treats’ campaign that gives consumers special offers and discounts on over 1000 brands, has seen an improvement in growth rates compared to last year, especially in consumer financing, electronics and apparel.
Mr. Ravi Santhanam, chief marketing officer at HDFC Bank said “We have seen a growth in the mid-20s in terms of percentage and this campaign runs till the end of 2019. Both online as well as offline transactions have grown more than what we anticipated.”
RBL Bank, which has the widest point of sale network with just under a million machines, saw a 21 per cent jump in transactions in the Diwali week led by supermarkets, garments, mobile phones and restaurants, Sujata Mohan, head of digital and new initiatives at the bank, said.