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Consumer spending on discretionary products, automotive, travel to increase this festive season, says Deloitte

Consumers are also looking at increasing their spend on travel and hotel stays and also intend to buy either new or used vehicles within the next six months, per Deloitte’s Global State of Consumer Tracker.

Consumer spending on discretionary products, automotive, travel to increase this festive season, says Deloitte
Consumers in India will buy more discretionary products during the festive season. Image: Reuters

Consumers in India will buy more discretionary products during the festive season and this is going to increase by 30 per cent. “Our recent wave 34 tracker indicates that despite the concerns over inflation, Indian consumers are willing to increase their spending during the upcoming festive season. Clearly online purchases remain strong, albeit to a lesser extent than during the peak of the pandemic,” said Porus Doctor, Partner and Consumer Industry leader, Deloitte Touche Tohmatsu India LLP. Consumers are also looking at increasing their spend on travel and hotel stays and also intend to buy either new or used vehicles within the next six months, per Deloitte’s Global State of Consumer Tracker. The growth in spending will come from all age groups, across categories and this comes despite concerns over inflation. The survey maintained that consumers’ intent to spend varies from clothing at 13 per cent, electronic and home furnishing at 10 per cent, and recreation, entertainment and leisure at 13 per cent, indicating a positive spending pattern courtesy the upcoming festive season.

Travel spends

The report also indicated that 70 per cent of the consumers surveyed were willing to travel to domestic destinations and 66 per cent were looking at international travel. With easing out of Covid-related restrictions in some countries, about 88 per cent Indians are planning to spend on leisure travel in the next four weeks. The trend, it said, will continue to see a spike due to an increased desire amongst elite consumers for cruise experiences in August 2022. Another trend in travel is ‘workation destination’. Consumers are preferring destinations that are suitable for work set-up and are relatively close to home or near a major tourist attraction.

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Budget for vehicles

Festive sale offers are driving the sales numbers in the auto industry, which is slated to ‘grow at a high pace in the next six months’. Per the Deloitte survey, consumers’ intent to buy a vehicle grew by 9 per cent in the past four months, from 69 per cent in April 2022 to 78 per cent in August 2022. As of August 2022, 78 per cent consumers across age groups are planning on buying a vehicle in the next six months and in that, 84 per cent will go for a new vehicle. This is due to the high maintenance cost of old vehicles and also ‘new features being offered by auto companies in latest models’.

Who’s saving more?

While consumer spending is expected to increase, how are consumers looking at their savings? The report said that on an average, consumers in India are less concerned about their savings and credit card balance as they were six months ago. Consumers in the age group of 18-34 years are more concerned about the savings compared to other age groups and they are showing greater intent to save money for the future compared to other age groups. Also, this particular age group indicated that they would spend more on customer experience.

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