Surge in Festive Sales in India: Sustainable Growth or Seasonal Distortion
Surge in Festive Sales in India: Sustainable Growth or Seasonal Distortion
Picture this: Prancing through your social feed, and getting ambushed by Diwali hauls. Then there are the timed-from-now “Just a few hours left!”, the flashing discounts, and the “No Cost EMI” banners that suggest you should act fast before each deal disappears. It is easy to see why close to 9 in 10 Indian shoppers say they are planning to buy something this festive season.
The mainstay of Diwali has shifted over time from a cultural recognition to what amounts to an economic occasion. E-commerce companies have successfully made it a year-over-year economic event. In just four years, online festive sales have surged from ₹72,000 crore in 2020 to nearly ₹1,20,000 crore in 2024, representing just under 67% growth, with a CAGR of 13.6%. From the metrics alone, the data is promising; however, it begs the key question – does the festive sales surge represent credible, sustainable economic growth or is it a momentary burst of spending driven by emotional purchasing behaviour, easily available credit and good marketing?
The Psychology of the Shopping Surge
Festivals in India had previously possessed excitement and togetherness; however, in today’s digital world, they are at a different level of engagement. The desire to celebrate is now coupled with the need to be engaged, and with that, people now want to be seen celebrating. When peers are continuously showing off their holiday outfits, devices and gifts, going against the trend can be unsatisfying.
Social media exacerbates this desire. According to a report presented by Meta in 2025, almost 65% of festive purchase decisions in India are made through short-form videos and content by creators. Livemint also quoted that around 60% of buyers find/see new brands during Diwali, which are often not needed, but due to simple curiosity or finding influencers suited to themselves.
This pattern showcases a shift in psychology, a rise of FOMO (Fear of Missing Out). Consumers are not just shopping to fulfil a need; they are shopping to fulfil a sense of belonging, validation, and relevance. What used to be considered thoughtful family shopping has now become more of a ritual that takes place on a digital platform where emotion, competition, and social performance mingle.
A generation ago, Diwali shopping meant going into the neighbourhood shop with family and discussing which fabric was better suited to your shopping budget. Now, it is adding to cart, applying discount codes and revealing your unboxing reels. The high from online shopping quickly replaces the slower reward from searching and selecting, then cherishing. While it may be easy, shopping as a whole contains more moments of pleasure than that slow reward.
The Cry of Credit: Easy Payment, Hidden Debt
If emotion is driving one half of the spending spree, credit is pushing the other half. Buy Now, Pay Later (BNPL) and No-cost EMIs can make anything from hotel stays to a pair of running shoes feel accessible. They provide the perception of being able to afford more, aggregating the cost into manageable monthly payments so that spending does not feel overwhelming compared to the total chapter it represents.
However, this perception can quickly give way to reality the moment multiple EMIs are activated. Upon concluding the holiday season, many shoppers (particularly young shoppers) found themselves with multiple credit bills to consider. Companies from banks, e-commerce platforms and fintechs can boast of record volumes of transactions, but many consumers have stretched their budgets and depleted their savings.
This pattern is indicative of credit-driven consumerism, a model that appears to be strong on the outside but is structurally fragile. When a person borrows to spend rather than spending from earned income, growth will be short-lived. It sustains higher consumption for a few months before adding risk to a financial situation that does not have the income to justify it. Moreover, this credit-driven wave is predominantly urban. Rural and semi-urban households, which continue to transact in cash and rely on savings, contribute significantly less to the growth in this realm. The impact has been an uneven consumption pattern – a growing digital middle class on one side, and a significant proportion of the population on the other side of the economic structure, which has barely had a taste of online finance or easy credit.
The Broader Perspective: Development or A More Pleasant Blip?
Festive season purchases add value to economies. They generate temporary jobs, increase GST, and drive demand in the logistics, retail and marketing sectors. However, lurking underneath this glitter are some warning signs.
Reduced product life cycles: Rapid technology upgrades are making purchases feel redundant more quickly. A phone purchased this year may feel insufficient to use during the following Diwali.
Urbanisation presents a challenge: The extent of the festive booms is favoring the metros and tier one urban cities, to the detriment of smaller regional towns and rural markets.
Affordability is distorted: When over-relying on credit, we start to misunderstand our level of well-being, yet we will continue to generate the stress of debt.
Another neglected discussion point is sustainability, as every year, festive packaging waste, unrecyclable decorations and tech junk arrive with the festive period. Most brands focus on maximising throughput but spend very little time discussing (if at all) whether to be responsible consumers and limit waste. The irony is rich: a festival celebrated for light and renewal creates an additional level of waste in the environment (or household or bank account).
So whilst festive purchases seem to energise the economy, much of that spending is cyclical, great high and does not reflect an ongoing trend. However, the investment is ensuring that it contributes to ongoing economic resilience and not just a temporary excitement factor.
Progressing Towards Responsible Growth
For Consumers:
Before you select “Buy Now,” stop and pause. Are you making a legitimate want, or was it a passing impulse spurred on by a sale or social post? Fiscal responsibility does not mean depriving yourself of fun; it means having fun while still being aware that it may affect your future accessibility. Finding quality versus quantity means weighing out whether a fringe minority trend is better than saving for the next “do” that’s going to fade in 2-3 months.
For Retailers:
You won’t build long-term trust by meeting short-term sales expectations. A good brand will outlast any short-term profit—you will survive a holiday season in the store, but cultivate clients that will want to come back and shop year end and year out. This can be accomplished with fair prices, an honest first interaction, and taking the time to follow up with later satisfaction about their holiday shopping process.
For Policymakers:
Financial literacy shouldn’t be an initiative, but should be thought of as a national priority! People need to know actual costs when it comes to credit-based purchases and how EMIs reflect on long-term savings. Governments can regulate windows of misleading online advertising and influence smart retailer incentives for sustainable shopping patterns—an example would be eco-packaging versus non-eco, or “made local” versus made abroad. Digital platforms can also influence consumer decisions toward more mindful purchases with reminders or transparency.
Citations
Ashish. (2025, October 7). Flipkart Diwali Sale 2025 : Top Inventory Strategies for Sellers. WareIQ. https://wareiq.com/resources/blogs/flipkart-diwali-sale-inventory-strategies
Tewari, S. (2021b, September 1). 91% consumers plan to shop during this festive season: survey. Mint. https://www.livemint.com/news/india/91-consumers-plan-to-shop-this-festival-season-says-report-11630477009900.html
RBI Bulletin – Reserve Bank of India. (n.d.). https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=21547
Business Today. (2025, September 24). Meta study reveals how AI, reels and creators are reshaping festive shopping in India. Business Today. https://www.businesstoday.in/technology/news/story/meta-study-reveals-how-ai-reels-and-creators-are-reshaping-festive-shopping-in-india-495472-2025-09-24
G, S., G, S., & Chronicle, D. (2023, October 13). Deccan Chronicle. Deccan Chronicle. https://www.deccanchronicle.com/business/in-other-news/131023/four-days-of-e-com-sale-loks-rs-29k-cr.html