Consumers prefer small purchases over big ticket goods this festive season: Report

Consumers prefer small purchases over big ticket goods this festive season: Report

27% have increased their usage of UPI/wallet payments, 49% still don’t use it.

Axis My India,

Mumbai: In a reflection of cautious optimism, consumers prefer small ticket purchases over white goods, cars, property and jewellery this festive season. The 46 per cent of families said they will shop for clothes, when asked on shopping plans for Dusshera/Diwali while only 11 per cent intend to buy a four-wheeler or a two-wheeler, as per the latest Consumer Sentiment Index (CSI) report by Axis My India for the month of September. 

In terms of online shopping behaviours 33 per cent are buying electronics like laptop, mobile etc. online while high value items like jewellery and even groceries (fresh food, rice, oil and meat) are still bought physically, indicating the view of 90 per cent and 92 per cent of the consumers respectively. The 40 per cent of Indians have watched IPL at least once this season, nearly 31 per cent of whom viewed it on a digital platform (OTT), as per the survey. Interestingly, the percentage of the audience watching online is higher in rural India.

The sentiment analysis delves into five relevant sub-indices – overall household spending, spending on essential and non-essential items, spending on healthcare, media consumption habits & mobility trends.

This month, the report also delved deeper to understand perception around festival spends, pre and post Covid-19 behavioural changes in terms of online purchase and UPI/wallet payment and citizen’s interest in IPL.

More than 88 per cent of the families denied any interest in buying white goods such as AC, TV, washing machine, and refrigerator, or jewellery this festive season. In addition, 92 per cent showcased negative sentiment towards buying home, plot, or a commercial property.

The consumer sentiment for the month also reflects that 76 per cent of the families will use their personal savings for making these purchases while only 21 per cent would prefer taking a loan from the bank or financial companies. This gives an indication that while buying spirit is moderate this festive season, the ticket size for purchase still remains small reflecting a cautious spending behaviour without denting one’s personal savings. 

Axis My India CMD Pradeep Gupta said as the pandemic retreats, there is a steady return to normalcy, but with a cautious control over spending considerations. “This is highlighted in the survey as 46 per cent of the respondents will prefer spending on small ticket items such as clothes, while only 11 per cent of the respondents will consider buying a two-wheeler or car. Expenditure on household essentials is more or less same since the last two months. However, expenditure on healthcare decreased compared to last month, suggesting people are being decreasingly affected by the pandemic," he said.

Reflecting a transformation in consumer payment behaviour in the post-covid period, 27 per cent have said that they have increased their usage of UPI/ wallet payments (Paytm/Phonepe/Google Pay) while 49 per cent still don’t use these online transaction mediums. Interestingly the increase in usage of UPI payments is gradually decreasing with increase in age of respondents. The increase is highest for the age group of 18-25 years which is at 36 per cent.  

“While 27 per cent respondents reported an increase in UPI transactions, almost 49 per cent still don’t use UPI/wallets, suggesting a tremendous opportunity in digital payments. IPL has proved its unparalleled reach and what is emerging as a trend is that audiences are increasingly viewing it on digital especially in tier 3/rural markets which still have electricity cuts & are single TV households," Gupta commented on the September report.

Some of the other key findings of the report are that Health continues to be an important consideration, with consumption on health-related items being increased for 44 per cent of families and decreased only for 19 per cent families. Overall household spending has increased for 56 per cent of families which is the same as last month. The spends increase on essentials like personal & household care is at 45 per cent. The net score is almost the same as last month which is at +20, said the report.

Spends on non-essential & discretionary products like AC, car, refrigerator increased for 19 per cent of families. This increase is highest in North & East whereas the increase in South is only eight per cent. This increase still reflects an overall decrease by two percentage points from the previous month which stood at 21 per cent. This can also be because, the period between 20 September and 6 October is considered the ‘Shradh period’ when high value purchases are postponed.  

Consumption of media reflects an increase for 26 per cent families, while constant improvement in mobility net score has been recorded since the past three months which indicates a steady return to normalcy. In terms of mobility 88 per cent families are saying they are going out the same or more on short vacations/ malls/ restaurants, with the overall mobility score is at negative five, which is an improvement over last month which was at negative eight. This reflects a slight progress in people’s sentiments in terms of conducting outside activities.

The surveys were carried out via computer aided telephonic interviews with a sample size of 10639 people, of which 59 per cent belonged from rural India while 41 per cent belonged from urban counterparts covering 28 states and eight union territories. The net CSI score, calculated by percentage increase minus percentage decrease in sentiment, was recorded at positive seven, rising at a constant pace over the last three months, indicative of a positive shift in consumer consumption metrics.