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“To celebrate a festival means to live out, for some special occasions and in an uncommon manner, the universal assent to the world as a whole” is how Josef Pieper, a German philosopher and writer defined the spirit of festivals.

Pieper’s perception of festivals is profoundly reflected in the spirit of Indian festivals. Historically, festivals have a very special place in the culture and life of India, India is the land of festivals; it celebrates festivals almost throughout the year and across the country. In Indian culture, festivals are more than just occasions for celebration; they serve as medium to the deepest and most profound aspects of life. Each festival carries its own unique significance, offering valuable lessons, spiritual insights, and cultural traditions that have been passed down through generations.

Come October and India is busy celebrating its biggest festivals - Durga puja and Diwali. Traditionally, festivals are a significant part of Indian culture, acting as a vehicle for promoting our values and emotions. While each community and each region has its own festivals, two of its biggest festivals; Durga puja and Diwali cut all boundaries and are celebrated across India and across religions.

Festivals, however, no longer remain as social, cultural or religious affairs; they have become huge economic multipliers today. Festivals like Diwali and Durga puja are considered by the traders as the focal points of marketing. The farmers can be seen to throng their shops with their newly harvested crops. This is the time when new products are launched and special sale offers are made by corporate and companies, all with an aim to expand market presence.

Uniting the celebrating spirits and religious sentiments of people, festivals have become the biggest marketing time for clothes, electronics, consumer goods, cars and even real estates. In fact, Indian sellers today eagerly await the onset of festive seasons with numerous offers, discounts and freebies.  

Economics of festivals

Festivals like Diwali are considered by the traders as auspicious moments to offer puja at their shop, open new accounts. All over the world, consumer sentiments and religious beliefs, often underlying festivals, play an important role in the economic activities of buying and selling of goods and services. Durga puja, Diwali, and their preceding weeks are traditionally a period of heightened consumption and investment in India. Demand and sales during this period are often seen as a barometer of the vitality of business and the economy.

Traditionally, sale of dress materials, consumer durables, electronic goods, jewellery and even big ticket items such as real estate and automobiles picks up during the festival times. The tourism sector also sees growth since holidaying to different destinations is common during Durga puja and Diwali.

But if sales of organised sectors rise during this period due to their huge marketing network and large advertisement spending, the unorganised sector too benefits by offering newer and exclusive products. Artisans, who mostly reside in rural areas, see significant rise in demand for their exclusive products, especially, from the new generation buyers during festival times. Youth of new India are now using and promoting mostly products made in the country, especially during festivals, which directly impacts the unorganised sector. The artisan industry is the second largest employer in developing nations after agriculture and employs women in large numbers. Their earnings go up during the festival season.

The economic impact of festivals is, in fact, too big to ignore. The total economic worth of the creative activities involved in Durga puja festival is about ₹32,377 crore and the festival contributes 2.58% of West Bengal’s GDP, reveals a study carried out by the British Council.

The first of its kind detailed study of different aspects of the Durga puja festival commissioned by the West Bengal Government’s tourism department looks at ten creative industries related to the pujas such as installation, idol making, lighting and illumination, retail, sponsorship, advertisement and food and beverages. The project was done between September 2019 and January 2020, with fieldwork completed in an intense three-week period around the time of the festival, and the report recently released.

The report ‘Mapping the Creative Economy around Durga Puja 2019’ points out that the economic value of the art and decoration segment was ₹860 crore and Kolkata accounted for 15% share of the pandal-making industry in West Bengal.

The Durga puja economy has increased manifolds since 2019 and according to West Bengal Chief Minister Mamata Banerjee the state witnessed business of over ₹ 85,000 crore and employment generation for around 3 lakh people during the 2023 festivities.

Referring to a survey by the British Council which stated that West Bengal recorded a business of ₹ 72,000 crore during this year's Durga Puja, a seemingly happy Mamata Banerjee said she hoped that the business will grow in the coming years.

Online festive sales projected to grow 23%

E-commerce companies and online sellers are expected to ship merchandise worth $12 billion to consumers in India during the 2024 festive season, up 23% compared with about $9.7 billion last year, according to data from market research firm Datum Intelligence.

Quick commerce may account for $1 billion of these ecommerce sales in terms of gross merchandise value (GMV), the report said. GMV is the total value of goods sold on ecommerce platforms, excluding discounts and returns

Ecommerce platforms, their sellers and major brands are preparing for robust sales during the festive season. This period of around two months, culminating with Diwali, typically brings a significant portion of revenue for ecommerce firms and other retailers Led by an improvement in consumer sentiments the 2022 festive season is considered by many as the precursor to market boom. The e-commerce companies, which have become the main drivers of consumption growth in recent years, are likely to see a 28% on-year increase in sales to $11.8 billion during the festive month with a spurt in fashion category, according to a report, while bellwethers such as Amazon and Flipkart have already initiated steps to prepare for the upcoming season sale.

Strategy consulting firm Redseer in its latest report ‘Online Festive Sales - The Biggest GMV Churner of E-Tailing industry’ has projected online sales to reach $5.9 billion in the first festive week itself against $ 4.8 billion last year. The growth is expected to be driven by the doubling of online shoppers during the festive season as against 2018 said the report.

The fashion category is likely to see robust growth, driven by an increasing shopper base from Tier 2+ cities and first-time shoppers who generally tend to begin their online shopping journey with fashion. There will also be an increasing participation of fashion-led players in the festive sales this year, Redseer said.

The mobile and electronics category is expected to remain strong during the period driven by better deals and new launches, it added.

The massive growth in festive sales will further push the overall online retail GMV (Gross Merchandise Value), which stood at $52 billion in 2021, to jump by 30% to reach $68 billion in 2022, Redseer said in the report.

The festive season would be critical for the ecommerce players like Flipkart and Amazon, both of which had an intense fight last year with last-minute changes to festive dates to outsmart each other.

Confirming the Redseer’s observations the RBI in its latest state of the economy report has said that the onset of the festival season should boost consumer demand, including rural, as sowing activity picks up. This is also reflected in improved consumer confidence. Consumer confidence is recovering after a prolonged period of subdued growth since the onset of the Covid-19 pandemic. Both the Reserve Bank of India’s consumer confidence index and that of the Centre for Monitoring Indian Economy’s (CMIE’s) consumer sentiment index showed a marked improvement in July. Improved perception about employment, household income and spending led to an improvement in consumer confidence.

The significance of festive time sales in India is enormous – more than a fourth of the yearly online sales are accounted for by the festive month alone.

The number of online shoppers during the festive week is projected to grow four times in four years from 20 million in 2018 to 80 million in 2022. However, the participation of online shoppers during the festive week compared to overall annual online shoppers is expected to double from 18% in 2018 to 38% in 2022. This is driven by multiple factors such as increasing awareness of the festive sales among shoppers, growing reach and targeted selection for shoppers across city type and growing expansion of the affordability constructs. In addition, the rise of new e-commerce models such as video commerce will further drive the growth of online shoppers during the festive period.

The month-long Great Indian Festival 2023, of the festive season 2023 was the best ever shopping celebration for Amazon’s customers, sellers and brand partners across the country. This GIF witnessed a record of 110 crore customer visits, making it the highest ever. More than 40 lakh new customers shopped on Amazon India for the first time. Customers accessed more than 5,000 new launches from top brands.

This was largely supported by an improved consumer confidence. A report by India's central bank showed consumer confidence touched a four-year high in September 2023 on the back of stabilising inflation and improving employment conditions. This was amply reflected in the sharp increase in consumer spending in 2023 festive season.

And if the consumer confidence index in July 2024 declined, online sellers are confident of record festival sales this time. Fall in retail inflation and a buoyant economy would boost up the festival sentiments of consumers, they feel.

E-commerce major Amazon India said it is witnessing strong consumption momentum and expects its “biggest ever” festival season sale this year. It said it has seen a growing number of orders being placed from tier-2 and tier-3 towns. Amazon Great Indian Festival 2024 will start from September 27, while Prime members will get 24 hours of early access.

The e-commerce major said that the sale event will see the launch of 25,000 new products and attractive deals from brands across categories. It added that it is making it “easier for customers to support India’s small businesses with exclusive deals and up to 70 per cent off on a specially curated selection.”

Jewellers hope gold to sparkle this Diwali

The World Gold Council (WGC) has raised its projection for India’s gold consumption in 2024 to 850 tonnes from 750 tonnes. A good monsoon coupled with a duty cut on gold will drive the demand, said John Reade, market strategist-Europe and Asia, World Gold Council.

Jewellers across the country are expecting gold to sparkle during this Diwali, as the substantial reduction in import duty has made prices appealing, providing comfort to retail consumers and encouraging purchases, industry officials said. India slashed import duties on gold in July to 6% from 15%, a step aimed at tackling smuggling.

Gold demand in India usually strengthens towards the end of the year, which coincides with the traditional wedding season and major festivals including Diwali and Dusheras, when bullion buying is considered auspicious.

The jewellery market saw record sales last year almost two years after the coronavirus pandemic threw several curveballs at the economy. According to the president of All India Jewellers and Goldsmiths Federation on Dhanteras, about 41 tonnes of gold and about 400 tonnes of silver jewellery and coins were sold in the country. In value terms, the total turnover of gold, silver and other items was Rs 30,000 crore across the country, he noted.

Global demand of gold in 2024 is forecast to rise by 4%, chiefly due to sales gains and restocking in India.Indian bullion market is expecting that Dhanteras sales this time will touch an all-time high following a better monsoon, lower retail inflation and prospect of higher GDP growth.

Big ticket sales

But if the improvement in consumer sentiment as well as improvement in macro fundamentals has boosted the prospect of higher merchandise sales in 2022, the automobile sales too are expected to see a significant rise in the festive season. Following improved demand, new launches and improved production, the passenger vehicle sales this festive season could touch their highest levels in a decade, the Federation of Automobile Dealers Associations of India said, adding that two-wheeler sales could also finally see an uptick this year.

According to Society of Indian Automobile Manufacturers, total domestic sales of cars increased 17.7% from a year earlier in August at 187,000 as improving availability of semiconductor chips aided a ramp-up in production. During the April-July period of the current year the passenger vehicle industry has witnessed a growth of 33% over the same period last year.

India’s residential real estate segment has recorded a 9-year high in terms of sales volume during the first half of 2022 (January-June), said London-headquartered global property consultancy firm Knight Frank.

The residential space saw an annual growth of 60 per cent during the period to 158,705 housing units across top eight cities in the country, as compared to 99,416 in the first half of 2021. For the commercial office segment, the Indian market grew substantially and delivered a strong performance as it recorded transactions to the tune of 25.3 million square feet, up by 107 per cent. It indicated the potential of the market on the back of a waning pandemic and promise of a sustained economic recovery.

For Indians, buying a home is as special as celebrating any festival. Buying property during Diwali is perhaps one of the best events every year. Many homebuyers consider this festival more auspicious and favourable.