Diwali was over one month ago. However, sales reports around the festival, which is the biggest consumption driver in the country, have been conflicting. Some analysts claim that this was the best Diwali in six years. Yet, others say that sales were muted. The news from e-commerce marketplaces was positive, while an Assocham (Associated Chambers of Commerce and Industry of India) survey held that malls, especially in the Delhi and National Capital Region, saw a significant decline in footfalls.

Pine Labs, a payment services company, has also come up with preliminary data on consumption. It has compared the festival season of 2014 (when Diwali was in the month of October) with the Diwali of 2015, which fell on 11 November.

The company also collated data for the period before the festival season kicked in. The numbers show that during the shraadh period when Hindus pay homage to their ancestors, spending dropped by 4-5%. The trend was visible in both years (2014 and 2015) and the decline has been identical. The 15-day shraadh is considered inauspicious by Hindus, who avoid buying new things or launching new projects during the period.

This is followed by the auspicious nine-day period of Navratras that marks the beginning of the festival season. During the Navratras, spending was seen to grow marginally by around 5%. Essentially it settled back to the pre-shraadh levels. “The marginal growth shows that the hype around Navratras is ill-founded. Again, the figures are identical for both years," says Raj Bhatia, senior
vice-president (consumer products business) at Pine Labs.

The caveat for the Pine Labs data is that these consumer spending highlights are based only on credit- and debit-card transactions across the top 15 cities of India in the 2014 versus 2015 festival period. However, Pine Labs services over 40,000 merchants and currently processes an average of 20 million payment transactions a month. The company claims it processes one in every 10 transactions conducted at any retail point in the country. Which means the data is a reasonable reflection of overall spending.

The Pine Labs data shows that spending peaks during the 20-day period between Dussehra and Diwali. Compared with the Navratras, the expenditure during this period grew by 18% this year. Last year, the jump was 16% for the same period. Clearly, on credit and debit cards, the expenditure spike between last year and this year was not significant.

The interesting bit is that although spending sees a decline post-Diwali, it remains higher than what it was during the Navratras. Clearly, consumers continue to spend after Diwali, which builds the momentum for shopping.

Founded in 2004, Pine Labs is one of the largest payment service providers in India, competing with rivals like First Data and Innoviti. The company is strong in the top 15 cities and modern retail, and captures transactions for 85% of the top retail brands. On any given day, the company picks up transactions from more than 35,000 retail points. From the data it gathers, it can track shopping and spending patterns across cities and product or service categories.

Data for the last three months in four major categories such as lifestyle, groceries, consumer durables and mobile phones, and dining/eating out reflects a moderate growth in lifestyle (6-7%) and robust growth of about 15% in consumer durables and mobile devices, compared with the same period last year. While dining out marked a marginal increase of 3-5%, the groceries category was flat.

The most crucial piece of data, however, is on the rise in weekend spending. Based on its analysis of the spending patterns, Pine Labs concludes that India seems to be getting out of home on weekends to shop, irrespective of festivals. Peak daily spending is recorded on Sundays. For example, the Sunday before Diwali saw peak spending for any single day in both the years. The Sunday shopping was
50-55% higher than average daily shopping during the Dussehra-Diwali period.

Saturdays are slightly behind Sundays with 35-40% higher spending than average during the period. Spending on national or state holidays is up to 50% higher than on weekdays. This trend doesn’t change even if the holiday is on a Friday or a Monday. For instance, during the long weekend—2 to 4 October (Friday-Sunday)—this year, the spending remained 75-90% higher than on weekdays.

This goes on to show that more holidays will increase commerce. On their off days, people drive out and when they go out, they spend. The millions of advertising dollars that marketers spend trying to woo customers to buy during Diwali may be better utilized reaching out to potential holiday shoppers on weekends as well as other public holidays. Indeed, marketers would be better off redeploying their advertising and promotion budgets across holidays through the year rather than earmarking disproportionately high budgets for the Diwali season.

Consumer spending patterns are indeed changing and Indians are no longer waiting through the year to shop during a festival even if it is as engaging as Diwali.

Shuchi Bansal is Mint’s media, marketing, and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.

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