Lower-income groups not so hopeful this festival season sale: Report

Ahead of the festival season in India, a recent survey by UBS Securities India Private Ltd shows that affluent consumers are beaming optimism about spending. Still, the optimism is not shared by those belonging to lower-income groups. 

According to a LiveMint report quoting a UBS survey, there were fears that the Covid-19 pandemic would lead to a rise in the income inequality gap as one of its economic consequences. However, the fear of increased income inequality has been playing out for two years since the pandemic.

India's annual per capita income at constant prices remained below the pre-Covid level at Rs 91,481 in 2021-22. However, the per capita income based on Net National Income at a constant price grew by 7.5 per cent in FY22 over the previous year.

According to the report, while the formal sector seems to have gained market share, the informal sector has suffered during the pandemic. It also added that the survey results confirm that the Covid-19 pandemic did not adversely impact the income levels of affluent Indian consumers. The survey corresponds to the upper-income households, who would have largely seen income and employment continuity during the pandemic.

According to a report published in Inc42, while the e-commerce platforms have seen an uptick in their festival season sale to Rs 24,500 crore, the average user spending has come down significantly. The average user spending stood at Rs 5,200 and is down by 30 per cent, a sharp decline from the pre-Covid levels. 

Meanwhile, e-commerce giants have witnessed an uptick in demand for their services in Tier-2 and Tier-3 cities and have decided to scale up efforts to expand.

"On September 22, we had the maximum number of sign-ups in our history, with 68 per cent of sign-ups from Tier-2 and -3 cities," said Noor Patel, Vice-President, Amazon India.

For Amazon India, the fashion category drives the festival season sale growth. While metro cities contributed 36 per cent of the sales for Amazon fashion, more than 60 per cent of these sales came from Tier-2 and -3 cities.