Why Diwali spending is primed to rocket in the US (2024)

For many businesses, holiday spending is a major part of Q4 revenue – think Halloween, Thanksgiving, Christmas and Kwanzaa. Now, as it gains national recognition, US merchants are increasingly embracing Diwali, the Hindu festival of lights, for its commercial potential.

While every region in India has traditions for commemorating this holiday, most celebrants broadly see Diwali as the triumph of good over evil, light over darkness and wisdom over ignorance. Also marked by Jains and Sikhs, it is celebrated every year in October or November, precipitating a range of private and public celebrations.

Diwali's profile is growing, particularly in the US. In 2022, President Joe Biden marked Diwali at the White House with the biggest-ever celebration. Recognition has also appeared at the state and city levels: the Pennsylvania State Senate passed a bill earlier in April this year making Diwali an official holiday state holiday; and in New York City, Mayor Eric Adams announced in June that Diwali will become a school holiday in the city's public school system, the largest in the country.

"Diwali is coming out from a liminal space and becoming a part of our national lexicon of holidays," says Soni Satpathy-Singh, a New York-based entrepreneur, who owns meal delivery review site Meal Matchmaker and works as a private chef and content creator.

To celebrate the holiday, consumers spend on gifts, food for parties, festive decor and floral arrangements. "Diwali is the equivalent of Christmas for consumption for South Asians in terms of buying new clothes, buying new things, painting the house," says Nirmalya Kumar, a professor of marketing at Singapore Management University.

In 2022, President Biden hosted the largest-ever Diwali celebration at the White House (Credit: Alamy)

Major retailers such as Target, Walmart and Costco have begun to cater to Diwali in the past few years, stocking shelves with Diwali-specific goods, including decorative productive products for the home, food and gift boxes. Greeting card aisles also display Diwali-themed cards alongside Christmas ones.

"I was more surprised to have recently visited my local TJ Maxx store and see a section dedicated specifically to Diwali with an array of brass and painted clay diyas, blinged out candles, mirror-work table runners, lanterns, acrylic rangolis and even Hindu deity idols," says Satpathy-Singh. "Right there, in between Halloween decor and Thanksgiving goods, was half an aisle full of Diwali decor items."

In India, consumers who celebrate Diwali represent a major revenue opportunity for businesses – and research shows purchasing from this group may grow this year, with approximately 70% of Indians ready to spend more this Diwali than last. Among those who planned to spend more, 68% said they are more likely to increase spending on new clothes, 65% on gold and jewellery, 64% on Diwali food items and gifts for family and 64% on friends and colleagues.

US retailers offering Diwali-related products are hoping these commercial trends will go international – Kumar says businesses are eager to tap into the spending power of Indian- and South Asian-American purchasers who hold celebrations.

And there's a big potential market. At nearly 4.4 million, the Indian-American population has grown by more than 50% between 2010 and 2020, according to 2020 US Census data, which includes groups that celebrate Diwali. The median household income among the country's Indian-American population was $119,000 (£96,220) in 2019, according to Pew Research Center, standing significantly higher than median incomes for the broader US population.

Kumar adds many of the celebratory aspects of Diwali – including ornate displays and firecrackers – also appeal to a broader population beyond South Asian communities. Although it may be difficult to quantify the magnitude of interest in the festival among mainstream American shoppers, a Pinterest-GWI global research study conducted in July showed searches for the term "Diwali celebration" were up 60% year over year.

For Satpathy-Singh, of the requests she received to cater Diwali parties this year, many were from non-South Asian Americans and companies. "You may not celebrate Diwali yourself, but you may know someone who does and will have 'stuff' to gift them with everything that is now made available in the US market such as cards, food, decor, to list just a few things," she says.

For online florist Flowerbx, Diwali-related purchases can amount to up to 30% of sales during the holiday week (Credit: Courtesy of Flowerbx)

As major retailers add Diwali merchandise to cater to this broader appeal, speciality stores and brands also stand to earn, too.

Patel Brothers, an Indian grocery marketplace chain with 51 US stores, has offered Diwali-related goods since its founding 49 years ago. Initially focused on food items, the company more recently expanded to accessories, including diya lamps, trinkets and party supplies. This year, the company debuted a line of patterned paper plates and cups, marking the growth of Diwali as an American holiday.

"We found a supplier to get paper plates, paper cups and napkins that have a Diwali theme on them," says Swetal Patel, a partner at Patel Brothers. "When you have a football party, you'll have paper plates that have a football theme or whatever. This is the first time we've brought in stuff like this." Before, they hadn't been able to find a vendor – now, the landscape has changed.

The rise of Diwali as a commercial occasion in the US, says Satpathy-Singh , likely saw a boost from the e-commerce boom of recent years, in which specialised brands were more easily able to send a range of Diwali offerings to a recipient's doorstep.

Whitney Bromberg Hawkings, CEO of online florist Flowerbx, a seven-year-old London-based company that serves consumers in the UK and US, says during the holiday week, Diwali-related purchases can amount to up to 30% of sales. In 2017, she says the company noticed an uptick in sales of "really bright coloured flowers, which is not traditional at this time of year. The biggest insight really is looking at the gift cards… so many people in their messaging were referencing Diwali". The company responded by increasing marketing efforts, including Diwali-focused emails and campaigns on digital platforms.

Kumar believes Diwali will largely stay a niche holiday for now, and may take time to spread past a core South Asian audience. Yet owing to its timing, Diwali may end up becoming part of a broader fall-winter holiday ritual to which Americans have become accustomed.

"Diwali parties are or will continue to be a thing, another holiday party … to host or attend," says Satpathy-Singh, "perhaps even a contender to join the pantheon of holiday parties that start in the fall and continue through the winter."