India’s festive economy is showing strong growth potential as Micro, Small, and Medium Enterprises (MSMEs) prepare for increased demand and consumers express greater spending intent. According to NeoGrowth’s Festive Outlook 2026, 80% of MSMEs expect a better festive season than last year, while 77% of shoppers anticipate spending more, creating opportunities across sectors, including fashion and jewellery.
Quick Summary
- 80% of MSMEs expect a better festive season than the previous year.
- 39% of businesses anticipate growth of more than 50%.
- 66% of MSMEs report additional festive-season funding requirements.
- 77% of shoppers expect to spend more during the festive season.
- Fashion & Jewellery is among the leading purchase categories, with 48% of shoppers selecting it.
- 75% of shoppers include offline channels in their shopping journey.
- 82% of shoppers expect to use digital payments.
- 16% of MSMEs already use AI, while another 35% plan to adopt it.
India’s Festive Economy Shows Strong Optimism
India’s festive economy takes shape as MSMEs gear up for demand and consumers show strong spending intent. Key Highlights
- 80% of businesses expect a better festive season, with 39% expecting growth above 50%.
- 2 out of 3 MSMEs report an additional funding requirement for the festive season.
- 75% of shoppers include an offline/in-store channel in their festive shopping journey.
- 82% of shoppers prefer digital payments, while 74% of MSMEs use them to manage or grow their businesses.
- 16% of MSMEs are using AI, while another 35% plan to adopt it.
India is entering the festive season with strong optimism among businesses and consumers. While 80% of MSMEs expect the festive season to be better than last year, 77% of shoppers expect to spend more during the festive season, pointing to strong business confidence and consumer intent. The findings from NeoGrowth’s Festive Outlook 2026, the 11th edition of NeoInsights, draw on insights from 7,000+ MSMEs and shoppers across 75+ industries and 40+ cities. The report examines how MSMEs are preparing for festive demand, how consumers are planning their spending, and the role of digital channels and AI in the festive season. The optimism among MSMEs is translating into ambitious growth expectations, wherein 39% businesses are anticipating growth of more than 50%. At the same time, 66% report an additional funding requirement, with Hyderabad and Delhi reporting the highest funding requirements at 71% and 68%, respectively.
MSMEs Gear Up for Festive Demand
MSMEs are actively preparing through a combination of inventory, new products and business expansion. 55% are increasing inventory, 31% are adding new products and 25% are expanding their businesses. The approach varies across sectors. Consumer Durables & Electronics, Fashion & Lifestyle and FMCG businesses are among the top industries strengthening their offerings, while expansion and service enhancement are more prominent among Services and Infrastructure businesses.
The Shoppers Show Strong Spending Intent
77% of festive shoppers expect to spend more, with Fashion & Jewellery (48%), Consumer Durables & Home Décor (46%) and Travel & Hospitality (24%) emerging as the top purchase categories. Shoppers are approaching these purchases in different ways. Price Comparers, who compare prices and look for discounts before buying, account for 45% of shoppers, making them the largest shopper group. At the same time, shoppers remain conscious of value and convenience. 49% cite discounts and offers as key influences, followed by convenience and seamless shopping at 38%.
Offline Shopping Remains Central as Digital Adoption Grows
The changing nature of festive shopping is also visible in how consumers are shopping. 75% of shoppers include an offline channel in their shopping journey, with 46% showing offline dominance, 29% following an omnichannel journey and 25% showing online dominance. Digital payments are also firmly embedded in festive commerce, with 82% of shoppers expecting to use digital payments and 74% of MSMEs already using them to manage or grow their businesses. AI adoption is gaining traction among MSMEs, with 16% already using AI and another 35% planning to adopt it, particularly in marketing and customer acquisition. Digital engagement is also expanding, with 22% of MSMEs reaching shoppers through digital marketing and social media.
Arun Nayyar Highlights the Festive Growth Opportunity
Arun Nayyar, Managing Director & CEO, NeoGrowth, said: “The festive season continues to be an important growth opportunity for MSMEs, and the findings show that businesses are preparing for it in different ways. While some are strengthening inventory and expanding their offerings, others are building capacity through business expansion. At the same time, consumers are showing stronger spending intent while remaining conscious of price, value and convenience. As festive commerce becomes increasingly connected across offline and digital channels, the ability of MSMEs to align their preparation with changing customer needs will be important as they navigate the season.”
Download the Full Report
To download the full report, click here: https://neogrowth.in/neoinsights
About NeoGrowth
NeoGrowth is a new-age lender focused on Micro, Small, and Medium Enterprises (MSMEs). It is a Middle Layer Non-Banking Financial Company (NBFC-ML), offering a wide range of products tailored to the dynamic needs of small businesses. Its data science and technology-led approach enables it to offer quick and hassle-free loans to MSMEs across 75+ segments and 46 locations in India. NeoGrowth offers a unique daily repayment option to its customers with multi-channel repayment modes. It has engaged with 4,00,000+ businesses and supported them with their growth ambitions. It helps small businesses grow while advancing financial inclusion and creating positive social impact. Founded by industry veterans, its Board of Directors comprises experts who guide the leadership team towards its strategic goals. NeoGrowth was founded by Dhruv Khaitan and Piyush Khaitan over a decade ago and is backed by renowned investors, namely Omidyar Network, Lightrock, Khosla Impact, Accion Frontier Inclusion Fund – Quona Capital, 360 ONE Asset, FMO, and LeapFrog Investments.
FAQs
What is NeoGrowth Festive Outlook 2026?
NeoGrowth Festive Outlook 2026 is the 11th edition of NeoInsights. It examines festive-season business confidence, consumer spending plans, funding requirements, digital payments, shopping behaviour and AI adoption.
What percentage of MSMEs expect a better festive season in 2026?
According to the report, 80% of MSMEs expect the festive season to be better than the previous year.
How much do shoppers expect to spend during the festive season?
77% of shoppers expect to spend more during the festive season.
Which are the top festive shopping categories?
Fashion & Jewellery leads with 48%, followed by Consumer Durables & Home Décor at 46% and Travel & Hospitality at 24%.
How many MSMEs need additional funding for the festive season?
66% of MSMEs report an additional funding requirement for the festive season.
Are offline shopping channels still important during the festive season?
Yes. 75% of shoppers include an offline channel in their shopping journey, with 46% showing offline dominance.
How widely are digital payments being used?
82% of shoppers expect to use digital payments, while 74% of MSMEs already use them to manage or grow their businesses.
What is the level of AI adoption among MSMEs?
16% of MSMEs are already using AI, while another 35% plan to adopt it, particularly for marketing and customer acquisition.
Source: SVAR Media Network
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