Ecommerce platforms play a big role in increasing consumer spending every year during Valentine's week
Discounts and easy availability of diverse products are attracting more customers from Tier 2, 3
From florists and cafes to dating platforms and music streaming apps, many startups are capitalising on the occasion
Despite India witnessing an overall economic slump, there seems to be no change in the discretionary spending during Valentine’s Day. The online and offline market for Valentine’s Day gifts and experiences has been steadily increasing every year and the trend is set to continue this year as well.
Attractive online deals and the availability of diverse products across platforms are garnering more consumers every year, especially from Tier 2 and 3 cities. Factors like time-efficient home delivery, 24-hour availability and a huge inventory of products to choose from are drawing in more and more online shoppers.
This demand met by online shopping is changing the overall increase in purchase around the festival of love. According to sources, on average, most ecommerce platforms clock transactions worth INR 10 Cr to INR 20 Cr in the week leading up to February 14. Thanks to carefully-crafted advertising and marketing campaigns, customers end up buying a lot of unexpected and unplanned stuff as well.
How Big Is India’s Business Of love
According to industry estimates, the digital gift voucher space has been growing at 70% year-on-year in India and this increase also reflects in Valentine’s Day gifting space.
“Because of the millennial audience, who shows a greater propensity for accumulating experiences over possessions, we have witnessed 25-30% traction for celebration or happy brands (for eg. BookMyShow, PVR, Dineout, Smaaash etc) which people tend to opt to have a good time with their partner since the beginning of Valentine week,” said Arvind Prabhakar, CEO, GyFTR.com
The platform is expecting 50% of traction on 13th and 14th February which is likely to be the largest in terms of volumes. “This year, we are looking at INR 10 Cr worth of transaction value which is a substantial jump compared to last year,” Prabhakar said.
Travel companies also see an increase of around 50% during this time of the year and popular destinations are the Maldives, Indonesia and Thailand for short-haul, New Zealand and Australia for the long haul. However, this year the trend may vary as there has been a slump in the travel business due to coronavirus.
India has also been a leading exporter of roses every year. Last year, roses worth around INR 27-30 Cr were exported by Indian rose growers for Valentine’s Day celebrations to countries including Malaysia, the UK, New Zealand, Australia and others. In 2018, the rose exports stood at INR 23 Cr and in 2017 it was INR 19 Cr, according to Indian Society of Floriculture Professionals (ISFP) estimates.
“The generation coming online and consuming today are younger and dynamically different than any generation before them. This is deeply reflected in their consumption habits,” Upasna Dash, founder and CEO, Jajabor Brand Consultancy told Inc42.
Valentine’s Day also has a huge impact on the sales of sexual wellness products and toys.
“Valentine’s shopping trends are now getting better as more and more people order in advance vs last minute. We saw our sales spike up across the month of January by 26% compared to December and 31% compared to last year the same month,” said Raj Armani, cofounder and COO, imbesharam.
The sales on the platform peaked from Feb 1-6 and slowly started to decline after that. Of the shoppers buying products for women, 27% were women and 32% were men. “This indicates about 32% purchased it for their partner, and possibly for use as couples or just for a partner in a long-distance relationship,” he added.
As per ASSOCHAM reports, Valentine’s Day spending was close to an estimated INR 22 K Cr in 2015 and INR 16K Cr in 2014. “Though this is an old report, I am positive that the trend has only moved upward from here. Consumers today have the spending capacity and an array of shopping avenues to choose from. So it’s likely that the spending has definitely increased,” said Vaibhav Jain, CEO and founder, Tynimo. According to the startup, customers have been looking for new additions in existing categories in the last one week.
The response for chocolates also is high during this period. Delhi-based Aadvik Foods saw a hike of more than 40% in chocolate sales during Valentine’s week in 2019. “This time we expect more than the previous year. Customers tend to buy our products in the chocolate and skincare category and they want good packaging. They are ready to spend more if it is a matter of health and going unconventional. So, we have curated hampers with chocolates and skin-care range like camel milk chocolates, sugar-free chocolates and day cream and body butter,” Shrey Kumar, cofounder, Aadvik Foods told us.
What Makes Valentine’s Day Popular In India And New Trends
According to general consensus in the retail market, Valentine’s Day is not as popular in India as it is in other countries. For instance, this year America’s Valentine’s Day spending is expected to touch $27.4 Bn, an increase of 32% from 2018. However, Valentine’s Day continues to be a trending conversation and a topical highlight of the year, more so every year with the influx of urban cosmopolitan lifestyle and increased internet penetration albeit choices sliding more towards roses, chocolates and not premium, well-planned gifts and experiences.
“While online netizens exchange multiple ‘I love yous’ on Valentine’s Day, this always online generation doesn’t exchange as many physical gifts or books as many restaurant tables. Multiple factors contribute to this. Unlike Diwali or Christmas, Valentine’s Day is not a holiday from work. Depending on the year we are in, 5 out of 7 times, it will fall on a weekday, leaving us with a higher probability of being stuck in traffic rather than being on date night,” Sanna Vohra, CEO and founder of The Wedding Brigade told Inc42.
The spending capacity of people has definitely led to the increase in buying gift items for loved ones. With double-income households, couples don’t mind spending a few extra bucks to make their loved one feel special. Smartphone penetration is yet another reason for the increase in gifting or buying products. Shoppers can easily access gifts online and order them within seconds. “Social media has changed the way we live. Days like Valentine’s day, though some people don’t want to celebrate it, they end up doing something special or buying a gift because of social media influence. So many brands out there put out quirky offers, discounts and new products for Valentine’s day. All this can be quite exciting for a customer,” said Jain.
Planning an international holiday is not as cumbersome as it was a decade back and this is an important reason why more people are travelling during special occasions like Valentine’s Day, anniversaries and birthdays. “With the ease of travelling made possible by technology, increasing disposable incomes and the craving of travel created by social media, the demand for romantic travel experiences and Lowxury (affordable luxury) is increasing,” said Hari Ganapathy, cofounder, Pickyourtrail.
This year, despite economic slowdown Valentine’s Day market is expected to hit a rise. One of the main reasons being the latest trend of big salaried youth estimated to be spending more than the youth in college and also believing in self-care. For instance, the number of solo travellers during this time of the year has been seeing a steady increase of around 20% every year.
“Valentine ’s Day is the biggest festival for most brands focusing Gen-Z. The biggest trend lately is that V-Day is also becoming a day of self-love and care. For those who are not going out with candies and flowers, it is a day dedicated to self-care. Now this could mean booking up a spa appointment or slathering face pack and sacking out at home,” said Dipali Mathur Dayal, cofounder of Super Smelly.
When Festival Of Love Becomes A Market For Startups To Cash In
The changing spending capacity has also changed how companies and now startups capitalize on this behaviour. “Till a few years ago brands did a massive push for offline activations. That momentum has moved online largely. Online vouchers, filters, campaigns, videos, most of it is being driven online. The biggest shift is that gifts & experiences have ‘grammable value. Products and experiences are now being designed keeping in mind how good they’ll look on Instagram!” said Jajabor’s Dash.
Many ecommerce platforms have curated Valentine’s Day special combos for products ranging from INR 500 to gadgets touching INR 20K. However, the most traction is unsurprisingly seen for affordable gifts such as men’s sling bag, digital watch, scented candles, reed diffusers, a showpiece flower, pens, artificial flowers and greeting cards.
From florists and cafes to dating apps and bike-rentals, startups are wooing their customers with special offers and trying to capitalise on the occasion. Many brands also run 20-50 % discounts during this time and give away free gift vouchers. For instance, Ferns & Petals is offering 20% off on digital e-gift Vouchers and customers who are buying gift vouchers of MakeMyTrip between 10th – 14th February stands a chance to win 50,000 worth of gift vouchers, both on GyFTR.
Dating apps and music streaming apps are also doing their bit to make the most of the day. TrulyMadly’s Valentine’s Day campaign called Forever Stories, inspired by the real-life stories of TrulyMadly couples, had more than a million views within a few days of the launch.
Spotify has also been curating India specific music for the occasion. According to Spotify’s consumption data shared last June, “love” was a streaming mood unique only to India. Globally, Spotify has seen a growing trend with listeners choosing to share their Valentine’s Day playlists with their special someone – for instance, last year, Valentine’s Day playlists were gifted almost twice as much on February 14, compared to 2018.
While most brands tend to approach Valentine’s Day by launching holiday-specific sales, or special product releases, some offer experiences like activities, trips, and new journeys the couple can undertake together. “On the day of romance, we have found the perfect excuse to spread the magic of travel by engaging our customers with a #BalintinesDay contest where customers have to share a photo of themselves with their Valentine on social media to win a 5D/4N free trip to Bali,” said Ganapathy of Pickyourtrail
Perfectly falling in the winter wedding season, Valentine’s Day is also considered as one of the most popular days to get married or plan the big proposal for someone special and wedding planning startups are surely making the most of it. For instance, The Wedding Brigade Shop has curated a Valentine’s collection that features outfits for a date night.
With the proliferation of global platforms like TikTok, Instagram and Facebook in India, there is an increased awareness of Western consumer events. Many shopping events such as Black Friday have already made their way to the Indian market. For instance, Nykaa’s Pink Friday Sale and thus the spend during Valentine’s is expected to grow further in the coming years.
“Over the last decade, we have been influenced by our western counterparts and Valentine’s has been popularised from countries in the west. Hence, my prediction is that Valentine’s can become a very important opportunity if planned and cashed upon in the right way by the retailers,” said Vaibhav Jain of Tynimo.
Sources for infographics: ASSOCHAM, Indian Society of Floriculture Professionals, Thomas Cook