Festival season sales: Over 50% consumers to shop online, says survey

This is a major jump from last year's survey when only 27% of consumers planning festive spending had indicated using e-commerce sites as their primary channel for shopping.

About 51 per cent of consumers doing festive shopping this year will use e-commerce sites and apps as their primary channel, a sizable change from previous years, according to a survey by community platform LocalCircles. In September 2019 survey of LocalCircles, only 27 per cent of those planning festive spending had indicated using e-commerce sites as their primary channel for shopping.

Covid-19 has had a deep impact on the Indian economy and its businesses. The country has crossed 6 million positive cases. LocalCircles said many businesses have been struggling due to the reduced sales and flattened revenues, but the festive season is likely to throw them a lifeline.

The months of October and November are considered as festive months in India. People usually spend on major purchases during this time. New vehicles, consumer electronics, whitegoods,  apparel, gifts for the family and home furnishing upgrades are some areas where Indians spend during the festive season.

Over the last few months, an increasing number of consumers have been shopping online to get things delivered at home. The primary reason for this is to reduce their exposure to crowded markets and protect themselves and their family from Coronavirus. Various e-commerce platforms have said that they have already reached the pre-Covid levels in terms of the number of orders and expect the numbers to substantially rise in the next couple of months.

The LocalCircles survey said that Indian consumer spend has significantly changed during 2020 due to the Covid-19 pandemic. An increasing number of consumers are now using e-commerce sites and calling or sending WhatsApp messages to local stores and getting home delivery. For many, shopping through these channels has become a new habit with rare visits to malls, shops and even the local market.

LocalCircles conducted an extensive study on understanding how the Indian consumer will spend during the festive season via online and offline channels. This exercise conducted at a national level and specifically in 50 top cities of India received over 300,000 responses from consumers across more than 330 districts of India. In the overall study, 63 per cent of respondents were men while 37 per cent participants were women. About 52 per cent respondents were from tier-1 cities, 32 per cent from tier-2 places and 16 per cent participants were from tier 3 and 4 and rural districts. 

Here are the key findings of the LocalCircles survey:

61% consumers are planning to spend during the festive season 2020.

51% of users shopping during the festive season 2020 are expected to use e-commerce sites as their primary shopping channel marking a major jump from the 2019 survey.

80% e-commerce shoppers say they will consider buying festive items online from small businesses, artisans and weavers if they are listed.

37% e-commerce shoppers will use it for gifting purposes during the festive season as only 19% expected to undertake festive travel this year.

Safety from Covid and convenience are top reasons why people will shop on e-commerce sites this festive season.

54% e-commerce shoppers are certain that small retailers and kirana stores will see increased sales if they sell online.

The majority want their favourite local sweet shop, namkeen and bakery to sell and deliver via e-commerce sites.

Top categories of consumer interest this festive season are festive grocery and food supplies, white goods, consumer electronics, home renovation and fashion.

Bengaluru, Hyderabad, Noida, Gurugram and Kolkata are among top cities where over 50% consumer spending is likely to happen via e-commerce.

Due to Covid-19, calling local stores and getting home delivery for festive shopping is also emerging as a sizable shopping channel in the top 10 cities of India.