This Diwali, I attended a few no-expenses-spared parties, with around 300 guests in attendance. The arrangements were lavish — almost akin to a wedding — and one can assume the costs went up to a crore. I haven’t seen so many large-scale parties, concerts and launches in a while.
The consensus across industry-related conversations was that consumption is back and we will see a huge boost after the recent GST reforms. I overheard people saying, “Finally, things are back to normal.” It’s been 5 years since the pandemic and it got me wondering when will the revenge buying/travel come to an end?
India witnessed a record surge in Diwali travel, with online platforms reporting robust growth in bookings. Travel and hospitality sectors also saw record demand — with hotels, flights and intercity buses operating near full capacity and major chains adding more rooms. And the country is poised for 10% growth this year in the global luxury goods market, according to Euromonitor International, as people give in to impulse buying.
The exuberance is not only fuelled by an aspiration to belong, but rather a desire to experience the best of everything. And part of this is definitely a way to counter the fear of “What if I get locked down again?”
On the economic front, it’s the age of quick commerce. With digital access and the entry of global brands, there are many more options. And Diwali ads that tug at the heart encourage you to spend generously.
There’s an entire new generation to tap into as well. Millennials and Gen-Z audiences are on their phones, trying to keep up with trends and ordering like there’s no tomorrow. Consider this: Festive sales on e-commerce platforms touched Rs 60,000 crore, according to a report by market intelligence firm Datum Intelligence.
Brands and industries are also headed to tier 2 and 3 cities, expanding the number of outlets and investing in visibility. This comes even as sales nowadays happen largely online. But, they’re seeing the mix pay off.
Investors are busy buying gold, silver, IPOs, crypto and equities — to maintain the frenzied pace of returns they saw over the last few years since Covid.
India seems to have got a taste of the finer things. But amid this mad rush to secure the best things and experiences, Indians are spending way beyond their means, using credit cards and taking loans. While stock market performance and GST reforms may account for some extra disposable income, it’s not a dramatic shift or increase.
The real question is: Are we headed for a consumption trap? While this boom is good for the economy in the short term, it is anybody’s guess what it will mean for the middle class in the long run.
On the other hand its about time we got access to the best, and its good to see more investments being made in the India story, as well as the market opening up to new brands and formats.