Indian Consumer’s financial confidence rises, brings a new wave of luxury spends this festive season
National, September 21, 2023: With the festive season nearing, Indian consumer confidence is increasing, with 56% indicating their readiness to spend on celebratory items. Additionally, 49% believe they can effectively handle significant unexpected expenses in the near future.
According to Deloitte's August 2023 research (*Wave 46 of the Global State of the Consumer Tracker, rebranded as ConsumerSignals), 75% of consumers report improved financial situations over the past year. This newfound confidence is driving an interest in luxury brands, exotic travel, and new vehicles.
Additionally, 77% of consumers express no concern about upcoming payments, hinting at a robust festive season. Looking ahead, 60% expect improved finances in the next year, and 59% envision living their best lives within the next five years.
In the short term, consumer spending is set to rise, particularly in clothing, personal care (12%), and recreation, entertainment, and leisure (14%). These trends point to increased spending as the festive season nears.
“India's booming economy is encouraging consumers to embrace premium and luxury spending. This shift extends across consumer durables, travel, and hospitality, with Tier 2 and 3 markets also showing significant growth. Discretionary spending is poised to increase, benefiting sectors like retail, automotive, and travel and hospitality.”
- Rajeev Singh, Partner and Consumer Industry Leader at Deloitte Asia Pacific
Indian consumers are not only making luxury purchases but are also planning exciting travel adventures, with a surge in domestic flight bookings (74% in August) and international flight bookings (58% in August) compared to July.
The demand for luxury hotels has also risen by 5% in August compared to July.
Moreover, 63% of consumers plan to buy a new vehicle in the next six months, a 4% increase from July. Reasons include the attraction of new vehicle features, high maintenance costs of current vehicles, a desire for something different, and a preference for fuel-efficient options.
Other Key Trends:
- Consumer Spending Sentiment: In August, 77% of Indian consumers were not worried about their credit card debt, and 61% had no intention to delay significant purchases in the near future. 60% anticipate financial improvements within a year, and 54% believe they are making progress toward financial goals.
- Impact of Rising Prices: Despite price hikes in food and grocery markets and consumer durables, consumers express confidence in their shopping plans. 55% are keen on investing in popular name brands for consumer durables, while 57% are ready to splurge on premium ingredients for food and groceries. 67% favour fresh foods over processed options.
About ConsumerSignals (erstwhile Global State of Consumer Tracker)
Deloitte's ConsumerSignal or Global State of the Consumer Tracker is an online panel survey fielded monthly across 24 countries. Monthly waves target approximately 1,000 adults (18 years and older) in each country. The country level approximate margin of error is +/-3%. Responses are weighted at the country level to mirror publicly available sources of age, gender and income distribution sources. India, South Africa, UAE, Saudi Arabia are only weighted by age and gender. Response data from India and South Africa are likely to be over representative of urban, higher income populations.
*Wave 46 is the survey done in July with its result out in August.
About Deloitte
This press release has been issued by Deloitte Touche Tohmatsu India LLP
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Mou Chakravorty
Deloitte India
Tel: +91 8454042392
Email: chakravortym@deloitte.com