It’s that time of the year when sales soar high, businesses break new records, and consumers across India spend the most.
PayU partners with several businesses, from enterprises to SMEs, to accelerate their business growth. Entrepreneurs, disruptors, and innovators from all industries and sectors run these businesses.
Let’s shed some light on how India shopped in 2022. We at PayU activated our data engines and put together a report on how India shopped during the festive season of 2022 and compared them to the shopping trends of 2021. Read this blog to know how India shops!*
But before we dive deep, here are some quick highlights:
- 2022 saw a 64% increase in expenditure & 31% increase in the number of transactions vis-à-vis festive sale period in 2021
- There was a 245% increase in expenditure & 130% increase in the number of transactions between the ‘normal’ period of 2019 & post-pandemic period of 2022
- One day in September witnessed about 7 million transactions (Yes, it’s enormous!)
Read an elaborative insight summary below.
Credit Care: The ruler of this generation
Since its advent, credit cards have been a preferred mode of payment for many Indians. Even though there is 1 credit card for every 12 debit cards, credit card users spent about 5 times more than debit card users in 2022. Interestingly, a credit card user spent Rs. 6000 on average compared to a debit card user who spent Rs. 2,500 in 2022.
Such an upsurge in credit card usage can be attributed to attractive cashback, reward points, discounts, deals & add-on services banks and brands offer.
A quick escape is highly preferred.
The pandemic years have marked a full stop to people’s movement. While it’s true that most of us might have done a trip or two already by now, there’s still a lot of momentum in the travel industry.
The travel and hospitality sector showed a 165% increase this festive season. Not only are Indians travelling extensively, but they are using all modes of travel.
- Cabs showed a 121% increase in expenditure.
- Train bookings witnessed a 50% increase in expenditure & 33% increase in average ticket size.
- Airlines saw a 95% increase in average ticket size
- Holiday packages saw a 70% increase in expenditure & 341% increase in average ticket size.
UPI is taking the lead across the board
The ease and success of UPI across the nation have enabled every nook and corner for a digital transformation. Most of our corner shops now have multiple QR right at the entrance. Of course, the usage has gone up. But our data suggest that the ticket size has decreased.
There was a 133% rise in the number of transactions and a 124% growth in expenditure compared to 2021, while the average ticket took a hit marginally (-4%). Consumers using UPI for small ticket items such as groceries, within-city travel & entertainment could be why the average ticket size declined.
The top 5 cities contributing to the highest number of transactions through UPI are Mumbai, Bangalore, Hyderabad, Chennai and Delhi NCR. Well, that’s a little obvious, isn’t it?
Sneak peek at the BFSI landscape.
With increasing financial literacy, ease of investing and a secure ecosystem across the nation, the insurance pace grew by 41%. Investments saw a 66% growth in expenditure & 50% growth in average ticket size. One of the reasons for this spike could be the increased adoption of do-it-yourself wealth management platforms – especially among millennials & post-pandemic behavioural changes. In the Banking and Insurance sector, transactions & expenditures increased by 100% and 143%, respectively.
It looks like a lot of good time lies ahead of the BFSI units, and the graph will continue to get beautiful.
Adoption of digital entertainment services
While it’s been sometime now that Indians have embraced the world of OTT and gaming, the year 2022 has seen some record-breaking statistics. The entertainment industry witnessed an increase in both expenditure and transactions of 52% and 54%. OTT expenditure has grown by 80% & transactions by 175%; gaming expenditure shot up by 20%.
What stood out here was the habits the tenure of the pandemic has set for all of us – OTT preference and avoiding public spaces (aka staying in the comfort of home). This is backed by our data that suggests that expenses related to physically watching movies and attending on-ground events decreased expenditure and transactions by 11% and 43%, respectively.
Other interesting finds
While the above states the specifics of certain areas, the other insights we found are:
- Education saw a 20% growth in expenditure & 24% growth in average ticket size. There is a 14% growth in university-related expenditure but a 40% dip in spending on upskilling. More Indians are paying for education using UPI. UPI transactions for education increased by 29%, while spending through UPI on education increased by 47%
- Patna, Indore, Ernakulam, Nagpur & Ludhiana are new entrants to the top 20 cities by expenditure in 2022. Maharashtra, Karnataka & Tamil Nadu continue to be top festive spenders.
*The report compares digital payment transaction trends on the PayU platform between the festive periods of 2022 (September 15 – October 15) and 2021 (October 1-31).
So, what are the takeaways for businesses?
Well, the easiest of all the conclusions here is that the festive season is an excellent time for business owners to earn maximum profits by catering to the increase in consumer demand.
While India moves to more credit-based shopping and UPI-led purchases, as a business, it’s almost mandatory to enable these options. And while you are at it, opening up other avenues to accept payments, like BNPL, EMI etc., is only an added benefit. Check out the payments suite by PayU and leap growth with your business today.