Spending propensity in urban India increases to 117.37; reaches highest post-COVID
24% of urban Indian agreed that they have more savings today than a year ago while 21% intend to splurge during Diwali.
ADVERTISEMENT
The festive season has officially begun in India with the celebration of Navratri. However, everyone is excitedly looking forward to the festival of lights, Diwali. As brands prepare for the festive season, the spending propensity has increased to 117.37 amongst the urban Indians, which apparently is the highest in the last four years or post-COVID, reveals YouGov’s Diwali Spending Index.
YouGov’s Diwali Spending Index
As per the YouGov data, the spending propensity has increased by 20.94 in 2024 as compared to 2023 as in the previous year the spending propensity stood 96.43. Notedly, the surge in spending propensity is particularly in tier-1 cities, which have seen a 35% increase compared to 30% last year.
Additionally, consumers in Northern India appear to be driving this growth more than those in other regions.
Commenting on this, Deepa Bhatia, General Manager at YouGov India, said, “Our Diwali Spending Index 2024 reveals a record high of 117.37, the highest since the last four years. This increase, particularly driven by higher household incomes and increased savings, indicates the importance of the festive period for consumption in the economy. It's clear that consumers are embracing the festive spirit with renewed enthusiasm despite some concerns on the economy surfacing. To capture the full potential of this opportunity, an understanding of consumer segments and motivations is a prerequisite for brands and marketers.”
Read More: Festive forecast: Auto and finance lead the way in digital advertising, says Zenith's Jai Lala
According to the data, 24% of urban Indian agreed that they have more savings today than a year ago while 21% intend to splurge during Diwali. Meanwhile, 34% of urban Indians said they are likely to spend more than last year during Diwali in 2024, up from 31% who said this in 2023. The proportion of consumers who intend to spend less this year remains nearly the same as last year, that is 25% in 2024 and 26% in 2023. Those who wish to spend the same amount is at 28% in 2024.
The Index was calculated as a weighted impact of nine factors including increase in gross household income, increase/decrease in household expenses, intent to invest or splurge and general optimism towards the economy on their intent to spend more/less this Diwali season versus last. Of these factors, the attribute with the highest weightage on the score is the increased household income as 35% of urban Indians stated that their gross household income is higher today than it was a year ago.
