The festive season in 2022 saw Indians spend the most on revenge travel and entertainment. The year saw a 64 percent increase in expenditure and a 31 percent increase in the number of transactions compared to the festive season in 2021, according to the report titled 'Insights Report-Festive edition' by online payment solutions provider PayU.

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PayU compared digital payment transaction trends on the PayU platform between the festive seasons of 2021 and 2022 (For 2022, September 15 – October 15, and for 2021, October 1, 2021-October, 31, 2021).​

Revenge travel is still in fashion.

The report further revealed that the expenditure of Indians in travel and hospitality increased 165 percent this festive season compared to the festive season of 2021.

Indians spent more from their pocket this year on travel and all forms of travel. Not only are Indians travelling extensively, but they are also using all modes of travel. There was a 121 percent increase in cab bookings, a 50 percent increase in train bookings, and a 33 percent increase in average ticket size for train tickets.

The typical ticket size increased by 95 percent for airlines. The cost of holiday packages increased by 70 percent, and the average ticket size increased by 341 percent.

The money spent on entertainment

Transactions for OTT platforms saw a sharp increase due to a boost in OTT platforms and content. OTT expenditure grew by 80 percent this festive season, and transactions increased by 175 percent compared to last year's festive season.

As a result of recent tech developments, the gaming industry also saw a boom as expenditure in 2022's festive season shot up by 20 percent from the spending in 2021's festive season.

There was, however, a decline of 11 percent in expenditure and 43 percent in transactions related to watching movies physically and attending on-ground events – perhaps habits that were established during the pandemic (OTT preference & avoiding public spaces) have continued into the present.

"We see that behaviours formed during the pandemic persist into the new normal with the preference for travel, digital entertainment & UPI continuing to increase this festive season significantly," said Paulami Das, Director of PayU Payments.

Credit card payment is preferred more than debit card payments

The research claims that credit cards were the most popular method of payment this season. Interestingly, even though there are 12 debit cards for every credit card, consumers using credit cards spent roughly five times more than debit card users in 2022.

Also read: Are big fat Indian weddings back? Vendors rejoice as post-pandemic sales soar even as inflation pinches

On average, a credit card user spent Rs 6,000 compared to a debit card user who spent Rs 2,500 in 2022. Year on year, credit card transactions and expenditures grew 42 percent and 84 percent, respectively.

Banks offering cashback, reward points, discounts, special offers, and add-on services on cobranded and independent cards may be one factor for the growth.

Handling all daily-use transactions with UPI

UPI transactions climbed by 133 percent, and expenditures increased by 124 percent compared to 2021, likely reflecting the economic recovery and rising UPI adoption by consumers and small companies.

Interestingly, the typical ticket size for UPI transactions has somewhat decreased (-4 percent). The fact that consumers used UPI for low-priced products like groceries and city transit & entertainment may cause a drop in ticket size. Mumbai, Bangalore, Hyderabad, Chennai, and Delhi NCR are the top 5 cities contributing to the most UPI transactions.

Moreover, the report also mapped the overall pandemic impact on Indians' adoption of digital payments for the festive period. There has been a 245 percent increase in expenditure & 130 percent increase in the number of transactions between the 'normal' period of 2019 & post-pandemic period of 2022.

UPI in e-commerce

Online shopping also went on a spree this festive season. According to a Redseer report, the e-commerce platforms generated sales worth $5.7 billion with 75–80 million online customers during the first festive week of festive season, which started on September 22. Further according to a survey by Axis My India 20 percent of consumers are expected do more shopping during this year’s festive season as compared to 2021.

E-commerce brand Shopify’s Festive Season Survey 2022 report also revealed that more than 78 percent of Indian consumers shopped online more than they did before the pandemic. The report also highlights that nealry two-third (67 percent) of consumers preferred making payments through UPI, which is a boost from last year where only half (49 percent) of consumers opted for UPI.

"As the digital wave continues, we expect to see commerce shift from ‘omnichannel’ to ‘everywhere’, with the majority (57 percent) of consumers saying they now browse online stores, product comparison sites, and social media platforms to discover new products," said Bharati Balakrishnan, Shopify’s Country Head and Director, India & Southeast Asia.

Also read: Today, even a small street vendor prefers UPI to cash: PM Modi on digital payments

First Published:Nov 15, 2022 2:36 PM IST