An increasing proportion of city-dwelling Indian households is anticipated to rely on online commerce and digital channels as their primary method for holiday shopping this year, based on findings from a LocalCircles study, which additionally indicates that recent changes to GST rates may boost consumer confidence.

The research forecasts a 115 percent rise in households that predominantly shop through digital platforms.

Nevertheless, the study observes that traditional brick-and-mortar retail will maintain its strong attraction for numerous shoppers. The findings reveal that 37 percent of metropolitan households plan to allocate Rs.20,000 or more for festive purchases, marking a substantial increase from 26 percent in 2024.

In total, holiday expenditure for 2025 is projected to hit Rs.2.19 trillion, according to the study's calculations.

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The study observed that following the government's implementation of GST modifications that reduced costs for appliances and electronic goods including air conditioning units, refrigerators, laundry machines, and televisions prior to the holiday season, a greater number of metropolitan households are anticipated to select digital commerce and web-based platforms as their favored approach to festive purchasing.

Metropolitan households point to ease of use, an expanded selection of products, superior cost-effectiveness, and straightforward return and reimbursement procedures as the primary reasons influencing their inclination toward digital shopping, the research indicates.

The 2025 study, drawing from over 200,000 responses collected from more than 44,000 households spanning 319 districts, indicates that urban India is preparing for a strong festive period characterized by increased expenditure and greater reliance on digital channels.

The findings reveal that physical stores and conventional markets continue to dominate the majority of transactions, although e-commerce is quickly becoming the most rapidly expanding sales channel.

The study also noted a significant shift in holiday shopping behaviors compared to 2024.

In the previous year, 70 percent of households indicated they planned to visit shopping centers, retail stores, and neighborhood markets for their buying needs. However, the most recent study demonstrates that this figure has declined to 56 percent, while 28 percent of participants now indicate they intend to make purchases online. In comparison, only 13 percent of participants in 2024 had stated their intention to shop digitally during the holiday season.

The survey revealed that among product categories anticipated to see substantial holiday expenditure, 44 percent of digital consumers intend to buy smartphones and electronic devices, while an equivalent portion plans to allocate funds toward home improvement projects.

Approximately 29 percent are expected to purchase major appliances and household equipment, whereas nearly 60 percent plan to invest in specialty foods, grocery items, and holiday necessities.

Furthermore, the report indicated that roughly half of consumers shopping through online retail platforms are projected to make purchases in fashion and cosmetics categories.