80% of businesses expect a better festive season, with 39% expecting growth: Report
Digital payments
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.
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 over 7,000 MSMEs and shoppers across more than 75 industries and over 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 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.
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%.
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, 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.”
