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We are a normal customer of the Diwali mania who is proudly part of the paradoxical world of DIWALINOMICS.
Photo Credit : Shutterstock
Have you purchased a new cellphone , a LED TV , a vehicle or plan to do so in the festive marketing season? Are you planning to get a new décor for your home or office set up before Diwali? Are you thinking of purchasing some gold metal on Dhanteras and ensure that Goddess Lakshmi blesses you with good fortune? Do you pick up each day’s newspaper and at least browse the first few whole page Diwali spree advertisements. Are you one of the Millenials who pick up their smartphone and instead of browsing through their office documents et al end up on one or the other online shopping platforms? If answers to these are “yes”. You are a normal customer of the Diwali mania who is proudly part of the paradoxical world of DIWALINOMICS.
After all typical preparation for Diwali celebration in an Indian house starts almost a month before the day. Most of the households indulge in splashes of wall colors to give their old house a new vibe of positivity followed by detailed purchase of white goods from markets. Women folk leave no stone unturned to prepare kilos of sweets often forgetting the New Year promise made to themselves ,to hit the gym and to cut down the calories. The house witnesses new set of furniture’s and interiors while its residents purchase anything that they can put their hand on in the market .All this is obviously preceded and triggered by the page full of advertisements with tag lines such as “Diwali Bonanza” or “Rush and Enjoy Diwali discounts”.These marketing gimmick plays itself beautifully by encapturing the mind of prospective buyers. The advertorial information thus floods the mind of a Diwali buyer and empowers them to indulge in shopping spree. It seems everyone in every household is in a competition to welcome Goddess Lakshmi and to attract her to their house.
This is one festival when “non-theories” of Economics is in full bloom. It is that time of the year when the basic premises of Economics, that of rationality and perfect decision making goes for a toss. The irrationality of typical Indian consumer is a spectacle to be observed during this festive season. The basic tenet of difference between the definition of “need” vs. “desire” is in full spot when all and sundry are desperate to purchase anything and everything just to satisfy their desire. Splurging on long lists of white goods or furniture or vehicles or clothes or household goods is a new normal for these days. No longer the basic principle of change in Demand and Supply with respect to price, influence the sale and purchase of these goods. This is a time when Behavioural Economics is in full play. A typical shopkeeper can be seen tweaking changes and nudging choices just to ensure maximum sales. Diwali is indeed a typical National shopping festival of India when Indians embrace consumerism with all their heart akin to the shopping spree of Western world during Christmas time. This is the time when it appears that the basic consumer of traditional theory of consumption forgets and moves way beyond the scope of consumer equilibrium. Budget planning goes for a toss and indifference curve doesn’t make sense. It is as if, the consumption graph is continuously increasing and the point of satiety is never to be achieved. It is really interesting to be a part of the paradoxical world of the yellow metal in India during the Diwali shopping season. Buying gold on Dhanteras (celebrated a day or two before Diwali) has been a part of the Indian tradition since ages. It is exciting to witness not only the women folk but also their male counterpart’s haggling and crowding the innumerable gold shops. The gold metal “utility” as strictly defined in economics parlance as wants satisfying power is in full play.
Observing a lady selecting a gold necklance, a ring and an earpiece helps one to witness the “Revealed preferences” as exhibited by a typical consumer of gold. It appears as if each is in competition to bring more luck for themselves and for their family by purchasing more and more of gold metal. India anyways has had an economic history of hoarding of gold and consequent low capital formation in the 18th and the 19th Century. The Gold market economics in play during Dhanteras and Diwali is after all the influence of culture and traditions on the consumer behaviour .In fact; all human behaviour including market behaviour takes place within a cultural context (Haris and Moran 1987). The gold metal thus during these days no longer remain merely a commodity but rather becomes a piece of tradition to be treasured for lifetime. People also indulge in shopping for firecrackers. A point of caution and moment to ponder is however whether or not to indulge in the shopping of firecrackers. This definitely calls for a rational thinking in terms of opportunity cost incurred with respect to environmental damage vs. some instant gratification from lighting the crackers. This festival drenched in consumerism also gives outlet to each individual household to think for their fellow earthen lantern sellers on the road. After all it’s a direct competition and a market layout wherein these earthen lantern sellers who work for months to come out with beautiful earthen lantern and other decorative pieces faces tuff competition from the cheap Chinese lights and statues which are often seen flooding the Indian markets . In days of globalised world, such is the choice matrix. Typical Diwali celebration also includes gift exchanges amongst family ,friends et al .The festival thus gives an opportunity to indulge in some sort of “welfarism” and “humanism” as well.
Of late, India has witnessed a different wave of Online shoponomics . The high demographic dividend of the country spread across metro, non metro, small towns and cities are found to be glued to the world of online shopping. With the penetration of smart phones in almost each and every household across socio-economic ladder, a one click shopping spree has become more of a norm for the Millenials. It appears that the part of India that resides in the oft away from metros are leaving no stone unturned to splurge and be a part of the festival of shopping. A recent Redseer report said that e-commerce companies have hit a gross merchandise value of $1.8billion in just the first three days of the various festive sales announced by these online shopping platforms. More than 90% of new customers for these came from Tier2 and Tier 3 towns and cities. India has in fact been the fastest growing online retail market in 2019 thus far. Such examples of consumer splurging amidst the RBI reports of consumer confidence dipping to six year low last month ,indeed gives some hope. It also proves that this is a new online market economics that transcends the basic boundary of economic theory and is here to stay for long. After all, Online world of shopping helps to meet the challenges of diverse geography and provide an outlet for unsatisfied desires and wishes of Millenials.
This is that time of the year when Diwali shopping is an emotion and excessive reliance on emotions to make economic decisions could result in irrational human behaviour . This splurging is however viewed as favourable consumption by most. A research by AP Dijksterhuis, a psychologist in Netherlands pointed out that “Contrary to conventional wisdom, it is not always advantageous to engage in thorough conscious deliberations before choosing. On the basis of recent insights into the characteristics of conscious and unconscious thought, we find that purchases of complex products were viewed more favourably when decisions had been made in the absence of attentive deliberations”. Thus, the oft unplanned Diwali shopping is not that bad deal.The Neo classical Economists considered that ordinarily people (always) ceteris paribus make rational economic decisions. However, people become irrational when they have strong emotions and feel strongly (in our case on the occasion of Diwali). In the present times of Minimalism and Marie Kondo theory, Diwali provides an exceptional occasion to go for maximum shelf purchasing. It is as if the festive vibes entangled with shopping zest gives the true happiness to soul and sparks the joy.
The excessive consumerism that one often associates with the festival of lights is all the more important in the present times when the economy needs the perfect dose of private final consumption expenditure. Whether one agrees or not with the basic preposition of J.S Mill that demand for commodities does not necessarily leads to demand for labor and employment or with Keynesian focus on consumption or with the tenet of assuming the economy to be a car with consumption as the steering wheel or would it be real investment and savings, it cannot be denied that this Diwali India needs dose of consumerism.
So over next two weeks, like Becky Bloowood of the Confessions of a Shopaholic don’t cut back on shopping but do indulge in intelligent shopping. Happy Shopping!
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.