Clothes and Sweets are the most popular gifting items among Indians consumers: Nielsen

Company Brief

Mumbai, December 20, 2007

Clothes and Sweets are the most popular gifting items among Indians, according to a survey conducted by Nielsen India on its Your Voice online research panel.

Clothes and Sweets are the most popular gifting items among Indians, according to a survey conducted by Nielsen India on its Your Voice online research panel.

The Nielsen survey found nearly eight in 10 Indians (77%) selected Clothes, Sweets (including chocolates (69 %) and Books (49%) as their preferred gifting items. However, differences emerge across different age groups in terms of gifting items, budgets and shopping channels.

While Sweets, Clothes and Books are universally popular; they tend to be more popular with the mature group aged 45 and above, while the younger crowd (15-24 years) prefers to give away technology gadgets such as mobile phones and MP3 players. (Refer Chart 1 & 1.1)

“The way technology has entered our lives in the last 10 years has been amazing, and is deeply affecting young people in their twenties who have grown up with it,” commented N. S. Muthukumaran, Director, Online Panel, The Nielsen Company, India. “To many, it is cool to be seen with the latest model of phone or music system and giving one as a present is in the same league, albeit a costly option for these young folks.”

Popular new-age gift ideas include holidays (travel and accommodation), travel tickets and tickets to amusement parks. It was noteworthy that about 20 percent would like to give wine as a gift.

Where people are buying their Gifts

Despite relatively high Internet access among people surveyed, ‘Shops’ (88%) are the most popular place to shop for gifts, followed by ‘Malls’ (80%), with more than half indicating they would shop online.

Online shopping is popular across both SEC* A and B (both 57%) and metros vs. non-metros (55% vs. 59%) and with those aged 25 years and above. It is interesting to note that online shopping is popular among people aged 45 and above (68%).

Books (46%), Clothes (35%), and CDs/DVDs (32%) are the favourite online gift purchases, each with 46, 35, and 32 percent respectively. People aged between 15 and 34 buy watches and clothes online and people in their mid forties and over tend to buy more books.

“With banks and other financial institutions taking the lead in making sure online transactions are secure with adequate safety measures, more and more people are taking advantage of the ease of online shopping. Ever increasing work pressures, long commutes, traffic snarls, and parking problems are other reasons driving more people towards the convenient option of online shopping,” added Muthukumaran.

Occasions for Gifting

Birthdays (96%) and weddings (73%) are the key occasions when gifts are purchased. Purchasing gifts on Valentine’s Day is popular among those aged 15-34, whereas buying gifts for partners for wedding anniversaries is more popular among the 35 plus years segment. Gifting during Valentine’s Day seems to be catching up in smaller towns, with non-metros matching metros (around 30%).

The festival of lights “Diwali” is by far the biggest reason for 84 percent of people surveyed to buy gifts, followed by Rakhi (57%), New Year (46%), Dushera/Puja (45%), and Christmas (24%). It is interesting to note that a higher percentage of people in the non-metros give gifts during Christmas than in the metros (33% vs. 22%).

86 percent of respondents buy Birthday gifts for immediate family members and 68 percent for friends. During birthdays, buying gifts for friends and colleagues is more prevalent in metros than non-metros. The younger age group (15-34 years) is more into buying gifts for friends’ and colleagues’ birthdays while the older age group (35 and above) seem to limit birthday gifting to immediate family members.

For anniversaries, festivals, and passing exams, gifts seem limited to immediate family members (81%, 84%, & 61% respectively).

Gifting Budget

The majority of Indian consumers believe their gifting budget has increased over the past two years and is likely to increase further over the next two years. People also spend more on gifts for immediate family members with an average spend of Rs.7,000 and the average spend amongst the mature age group on gifting their immediate family is even higher (average is around Rs. 13,000). Extended family members and business partners are the next groups likely to receive gifts of higher value, with the average amount being around Rs.2,500 and Rs.3,000 respectively. The average spend on gifts for friends and colleagues is around Rs.2,000 and Rs.1,200 respectively.

“Rising disposable incomes and an overall improvement in lifestyle among Indian consumers are reflected in their gifting attitudes,” added Muthukumaran.

While choosing a gift for someone, it is important for many to personally choose the gift as well as make the gift unique. In addition to this, for younger people (15-24 years), an element of surprise with the choice of gift is seen to be important, while the older set (35 years plus) believes that it’s the thought that counts.

“The generous gifting attitude among increasingly affluent Indian consumers presents huge opportunities to retailers,” Muthukumaran said. “As the Nielsen survey indicates, the experience of gift shopping, many feel, would be enhanced if the shops offered services such as gift-wrapping, gift delivery, and a refund policy in case the recipient wants to exchange gifts. It’s up to the retailers to capture these golden opportunities by considering such services to attract the big spenders.”

The survey also covered what people bought for themselves or their households during festivals. Clothes and sweets (chocolates included) were the most popular purchases for the household (80% and 61% respectively), while people also purchase mobile phones (45%), entertainment gadgets such as TVs/home theatre systems/DVD players (45%), CD/DVDs/CDROMs (44%) and electrical appliances such as microwave, washing machine, and refrigerator (42%) during festivals. These purchases were predominantly made during the festival of Diwali. To herald the arrival of the New Year, young people (15-24 years) are particularly interested in buying Clothes during the New Year.

About the Survey

The Nielsen Company, India, using their online research panel Your Voice, conducted the survey to understand the pattern of gifting. The survey was conducted amongst 436 people across various age groups starting from 15 years onwards.

For further information, please contact:

Nayna Banerjee

Tel: +91-22-6663 2884

Mobile: +91-098201 81731

Email: nayna.banerjee@nielsen.com