Diwali Time ??
It's that time of the year again!
Festival lights are twinkling all around, people are frantically buying new clothes, carefully curated diets are being traded for chocolates and sweets, and Diwali party invitations are flooding WhatsApp groups.
But the impact of Diwali is much more widespread than you can see. From growing vehicle sales to the increase in gold demand to the rising consumption of sweets, Diwali influences not only the festive mood but also the Indian economy.
The Diwali Economy:?By the Numbers
According to the Confederation of All India Traders (CAIT), the 2023 Diwali season generated ?3.75 lakh crore in economic activity. And this number is expected to increase to ?4.25 lakh crore this festive season!
This surge in economic activity is driven by several factors: ?
...and more.
How does Diwali's economic impact compare globally?
While Diwali's economic impact is significant, it's still outpaced by some international counterparts. Take China's Spring Festival. During the monthlong 2024 national online Spring Festival shopping season, China's online retail sales totaled 1.2 trillion yuan (about 168.86 billion U.S. dollars)! Or the 2024 US Christmas and holiday season, spanning a longer period, is expected to see retail sales exceed $1 trillion!
Retail Bonanza ??
Did you know, just during the first week of festive sales, e-commerce marketplaces sold goods worth $6.5 billion, or almost ?55,000 crore? That's a 26% increase from last year. But this is not all. Estimates suggest that the total festive period of 2024 would be close to ?100,000 crore. Some estimates even take this number further to ?120,000 crore!
Furthermore, the growth was not restricted to major cities; rather, high demand was found in Tier II cities and beyond. For example, Meesho claimed that approximately 45% of buyers came from cities in Tier 2 and above!?
Automobiles (My fav sector) ?????????? Courtesy: CarDekho Group
Culturally, Diwali is considered an auspicious time for big purchases. Around 30% of annual sales of these car makers happen during the festive season!
Automakers capitalize on this by offering substantial discounts, which in 2024 could be more aggressive than ever, given the current 80-85 day inventory levels—translating to approximately 790,000 vehicles worth ?79,000 crore. Moreover, the top manufacturers have also announced discounts of up to ?2 lakh on their best-selling models in recent months to boost sales!?
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And the result is visible. Footfall at car showrooms has increased by almost fourfold in the first week of October. Moreover, enquiries and bookings for automobiles are up 3-4 times compared to the past 2-3 months, as per dealer comments.
Gold and Jewelry?Market ??
It's also prime time for the country's massive gold and jewelry?market. As the world's second-biggest gold buyer, India sees a big jump in gold purchases during this festival.
But this year isn't the same. Experts expect a 12- to 15% drop in demand during Diwali. The reason? High prices! ?
Real Estate (My Wife's Fav Sector) ???? Priyangna Sharma
The festive season, especially Diwali, continues to be a prime time for India's real estate?market, driven by both tradition and smart?marketing?strategies.
Developers are rolling out attractive festive packages to tap into the cultural significance of new beginnings. These offers go beyond simple discounts—think complimentary parking spaces, GST waivers, and even luxury perks like gold coins or cars with property purchases.
Sweets Industry ??
Picture a typical Indian household a week before Diwali. Chances are, there's a box of sweets on the dining table, another in the fridge, and probably a few more waiting to be distributed. Now multiply this by millions of households across India. That's the scale we're talking about.?
Indians love their mithais, especially during Diwali. As per media reports, nearly 30–35% of the annual revenue of sweet shops comes in just these few weeks.
The stock?market?in Diwali
As the festival reaches its peak, the stock?market?also adds to the economic activity—through a special one-hour stock?market?session called Muhurat Trading. ?
The tradition goes back to 1957, when the Bombay Stock Exchange first held a Muhurat trading session. The idea? Start the Hindu financial year with an auspicious trade
The bottomline
As India's economy continues to grow, we're also seeing a fascinating evolution in how Indians celebrate—from embracing digital gold investments to using quick commerce for last-minute festive shopping. ?
Perhaps the most telling indicator of Diwali's economic influence is how it creates a ripple effect across sectors—from 30% of annual car sales happening in this period to real estate launches worth ?1 lakh crore in Delhi-NCR alone to sweet shops making a third of their yearly revenue. Diwali will continue to be not just India's biggest festival but also one of its most important economic events.