Diwali is the time when Indians loosen their purse strings. From getting their homes refurbished to buying consumer goods, clothes, and accessories, this is the official shopping period.
Though Covid had a big impact on consumer spending, over the last two years, the enthusiasm for Diwali shopping seems to be back. According to data from Statista, a consumer and market data provider, consumer spending across India has made a sizeable recovery and amounted to over Rs 22.6 trillion by the end of the second quarter of 2022.
Though consumer spending is on a high, rising inflation is a matter of concern, but freebies, offers and discounts available at e-commerce and other retailers may add the nudge that’s needed for Diwali spending. But before you get tempted and go all out, look at the deals carefully and assess what you really need.
Diwali Offers
From cashbacks, redeemable reward points, and instant credit to free cryptocurrencies, there are various offers in the market now.
E-commerce giants Amazon India and Flipkart kicked off the mega sales season with the “Amazon Great Indian Festival” and “Flipkart Big Billion Days”, a non-stop, month-long shopping extravaganza in the third week of September.
Manish Tiwary, country manager and vice-president of consumer business, Amazon India, says, “We are looking to work with more than 150 influencers to generate 600 live streams to help customers make an informed purchase decision.”
Some platforms have taken to innovation and are even offering cryptocurrencies as part of the deal. For example, Flipkart has tied up with cryptocurrency exchange CoinDCX to offer cryptos as a freebie with some products. Some other products are offering a membership with Byju’s, an online educational platform.
Similarly, GoSats, a Bengaluru-based crypto rewards firm, lets users earn Bitcoin cashbacks when they shop with its partner merchants. “Users can passively invest in Bitcoin using GoSats. It has no restrictions like expiry date, complicated terms of use, or withdrawal. Shoppers earn a portion of Bitcoin or ‘sats’, short for satoshis, which is deposited to their GoSats wallet,” says chief executive officer Mohommed Roshan.
In addition, merchants are offering instant discounts for various transactions, such as credit and debit card purchases, equated monthly instalments (EMIs), and no-cost EMIs, among others. For instance, Amazon Pay Later provides customers with instant credit of up to Rs 60,000, which can be paid in the subsequent month or converted into 12 easy EMIs.
Others, like Snapmint, an e-commerce platform, are going big on buy-now-pay-later (BNPL). Snapmint co-founder Abhineet Sawa says, “Consumers need liquidity to afford their best lifestyle during Diwali. Most brands see 20-30 per cent higher average order value on BNPL than other payment options.”
Navigate The Offers Wisely
With so many choices in the market, finding the right deal could be nerve-wracking. Buyers may have to look harder for details to avoid lending traps. Reading the fine print of such offers beforehand can be helpful. Says Adhil Shetty, chief executive officer, BankBazaar, an online financial marketplace, “Compare your offers. Not all offers are created equal. With the festive season, plenty of offers are around.”
Also, checking BNPL offers before purchasing should help, as there could be one-time fees or processing costs involved. Additionally, customers may have to pay high interest rates if they are unable to repay the loan on time. “Your credit behaviour gets reported to credit bureaus. Late payments hurt your credit score. Timely payments improve it,” adds Shetty.
Never ignore your own needs. Sometimes it is tempting to buy an attractive item even if we don’t need it. For example, an offer of getting a free mixer grinder with a television may be tempting but assess if you really need the grinder—families may already have it. Avoid such traps to maintain your financial health.
“Don’t fall for cashbacks or ‘Buy-2-get-1’ free offers. These offers are useless if you don’t require those products,” emphasises Novaii Navlakhi, the CEO of financial management company International Money Matters.
What Should You Do?
Plan In Advance: At the time of reading this, Diwali would still be a few weeks away for you. Plan your shopping carefully. Look at your budget and how much you can afford. Also, make a list of things you really need and plan your shopping accordingly.
Navlakhi says festivals bring joy, but they also involve a lot of spending on gifts, decorations, etc., so making a list of items to know what is essential and what isn’t should help. “Buying luxury items should not be an immediate decision. You can open a separate bank account and start saving the amount you want to spend; this is how you can keep track and ensure you are not overspending,” adds Navlakhi.
Avoid Debt Traps: With so many retailers offering BNPL schemes, it is vital to assess if you can indeed repay it later. “Taking loans to buy a product is not a good option. Discounts are attractive, but stick only with the list of essential items,” says Navlakhi.
Moreover, zero-cost EMIs may not necessarily have no cost attached. You may have to pay a processing fee upfront to avail of the offer or pay extra GST. In the end, it may become more expensive than the product’s actual price.
sanjeeb@outlookindia.com; himanshu@outlookindia.com