Gen Z festive spending: 1 in 4 use AI for gift ideas, study finds

Six in 10 young Indians spend more during major festivals, and one in four now use artificial intelligence (AI) tools for gift ideas, according to a study by the venture capital firm Rukam Capital with the market research company YouGov. Findings on festive spending from the study, titled "Gen Z: A Deep Dive into India's Most Influential Consumer Cohort", were reported in the last week of October 2026, ahead of Diwali on November 8. The survey covered 4,002 people aged 18 to 29 across 18 Indian states.

Gen Z, roughly those born between the late 1990s and early 2010s, is now a large share of India's shoppers, and many are spending their own first salaries this festive season. The study suggests that this group mixes tradition with new habits. Family still comes first: three in four gifting choices are aimed at parents and relatives, which reflects how central the household remains to festivals such as Diwali. At the same time, almost a third treat themselves, and half say they look for healthier snacks, a sign that wellbeing has entered the festive basket alongside sweets.

The AI finding is the newest part. A quarter of respondents now ask AI assistants for gift ideas, and the share is highest not in the big metros but in Madhya Pradesh and Bihar. This fits a wider pattern in the same study, which found that 70% of young Indians are comfortable with AI recommending products and services and that many use or consider AI for decisions on health and careers. It also found that 49% would allow AI to make some decisions without their approval, which raises questions about how much young shoppers should hand over to software.

Regional differences are sharp. In Chhattisgarh, fashion led festive spending, with 61% buying clothes or accessories. In Punjab, food (54%) and gifting (48%) stood out, while in Delhi traditional or religious items (43%) and gifting (42%) were prominent. For businesses, this means one national festive campaign may miss what young buyers in each state want.

What should a young reader take from this? Festive spending is easy to underestimate when it is spread across many small purchases, from clothes to sweets to gifts. Before Diwali, set a total budget, decide how much goes to family, gifts and yourself, and track it. If you use an AI tool or online search for gift ideas, treat the suggestions as a starting point: check prices across sellers, read return policies, and be careful with links that promise deals too good to be true, which are common around festivals.

The study is a survey of what people say about their habits, not a record of actual spending, and it was commissioned by an investment firm. Its numbers are best read as a picture of attitudes rather than exact market figures.

Short-term: Brands and online sellers are likely to lean further into AI-driven gift recommendations and state-specific festive offers during the Diwali week.

Long-term: As Gen Z's spending power grows, its mix of family-first gifting, self-care and AI-assisted choice is likely to shape how festivals are marketed in India.

Who is affected: Young shoppers aged 18 to 29, their families, consumer brands, online marketplaces and small sellers competing for festive demand.

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