India’s festive spending patterns this year point to stronger consumption in smaller cities, rising digital payments and increased spending on travel, electronics, beauty and personal care.
While tier III markets are recording faster growth in transaction values than metros, consumers are also using credit and equated monthly instalments (EMIs) to finance larger purchases.
However, spending growth remains uneven across categories, with everyday consumption witnessing weaker traction in some segments.
Pine Labs data shows that tier III markets recorded 50% growth in total transaction value across its payment network, compared with 30% in metros. Their share of network spending increased from 18.3% to 20.8%, overtaking tier I markets at 16.1%.
Digital payments are contributing to this shift. Card transactions in tier III markets grew 35%, against 5% in metros, while UPI transaction volumes and values increased 91% and 95%, respectively. The average UPI transaction value was also higher in tier III markets at ₹1,500, compared with ₹1,346 in tier II markets and ₹1,229 in metros.
Higher-value purchases are also driving festive spending.
Data from credit-on-UPI platform Kiwi shows that spending on its platform increased 12.1% year-on-year, led by a 20.8% rise in electronics and appliance purchases. In contrast, grocery and quick-commerce spending declined 1%, while food delivery and restaurant spending fell 5.4%.
The value of purchases converted into EMIs on Kiwi rose 25.2% to around ₹5 crore. Electronics EMI purchase value more than doubled, increasing 116.6%, while e-commerce EMI value nearly tripled.
Siddharth Mehta, Co-founder and COO of Kiwi, said consumers are using credit more selectively for larger, planned purchases, with the increase in EMI usage reflecting a preference to spread the cost of high-value spending.
Travel is another category seeing increased outlays.
Pine Labs data shows that transaction value in the category rose from ₹537 crore in July to ₹1,055 crore in September. Average transaction values increased from approximately ₹10,800 to ₹21,100, while transaction volumes grew 13%.
Dining and food businesses are also reporting festive demand, although preferences vary by region.
Gaurav Kanwar, Founder of Harajuku Tokyo Café & Bakehouse, said footfall at its western India outlets was up 12% from last year, with more group dining. In northern markets, demand was more concentrated on festive hampers and gifting for house parties.
Beauty and personal care are also seeing seasonal traction.
Aniket Aggarwal, Deputy Manager, E-commerce at Maliao Cosmetics, expects festive demand for the brand to grow 20-25% year-on-year, driven by makeup essentials, statement lip colours, complexion products and gifting combinations.
Raj Chaudhary, E-commerce Head at Glam21, also expects sales to increase 20-25%, citing demand for festive makeup, skincare and beauty combos. He said tier II and tier III markets were expected to contribute to consumption, supported by e-commerce and quick-commerce platforms.
Nilesh Kothari, Founder of Billu Salon, said bookings for personal grooming services could increase eight to 10 times during the festive period compared with regular volumes. Manicures, pedicures, waxing and facials are among the popular services for women, while men largely book beard grooming and haircuts.
Convenience-led food purchases are another feature of the season.
Akshay Verma, Managing Director of VTC Group and Co-founder of Oli Ohh, said the company is seeing demand for its products across festive hampers, gifting, late-night snacking and house parties. He also reported increased sales on Zepto since Ashtami and Navratri.
Taken together, the observations point to a festive consumption season shaped by stronger participation from smaller cities, digital payments and spending on planned purchases, travel and lifestyle categories.
The growth, however, varies across products and services, rather than indicating a uniform increase in consumer spending.