Will Dussehra-Diwali festivities drive momentum to the retail demand, which has been sluggish so far this festive season? Retailers are keeping their fingers crossed that it will.
Sales during the first three days of the e-commerce festive days, which kicked off on Friday, have been weak, going by initial indications from industry executives. Makers of a host of merchandise ranging from electronics goods to fashion and lifestyle products, who have a lot riding on the festive season, are, however, hopeful that the retail demand will revive in October-November. Retailers expect discounts on some products could be much higher this time around.
Consumer spending is likely to touch Rs 5 lakh crore this festive season. That’s about 25% more than the spends of Rs 4 lakh crore during the Dussehra-Diwali period last year, according to estimates by Deloitte, Redseer, and the Confederation of All India Traders (CAIT).
Of this, the online channel could turn in sales of around Rs 1-1.2 lakh crore in terms of gross merchandise value during the festive season despite a weak start to the ongoing e-commerce sales festivals, Kushal Bhatnagar, associate partner at Redseer Strategy Consultants, said.
Sales of TVs, mobile phones, and home appliances declined by about 5-10% in the first three days of the ongoing marketplace festivals, according to industry executives, though e-tailers such as Meesho, Amazon, and Flipkart say they saw orders boom and a surge in app downloads on day one of their respective festivals.
Offline retail, on the other hand, will likely clock sales of around Rs 3.8 lakh crore this festive season. Beneficiaries will include durables and electronics, fashion, apparel and lifestyle products, jewellery, toys and other gifting items, kitchen appliances, beauty and personal care, and sweets and confectionery, says Anand Ramanathan, partner and leader of consumer products & retail, South Asia, Deloitte, as they vie for a larger share of the consumer’s wallet during the festive season.
“The online sales began early this year, which contributed to a slow start as far as consumer electronics such as TVs are concerned. But as Navratri, Durga Puja, Dussehra, and Diwali kick in, sentiments will improve. We see larger TV screens and the premium end doing well this year,” says Avneet Singh Marwah, CEO of Super Plastronics, which manufactures TVs, washing machines, coolers, and ACs.
Devarajan Iyer, ED & CEO of the department store chain Lifestyle, says that sales of fashion, lifestyle, and apparel products will pick up in October-November, led by the festive and wedding season. “The second half of 2024 has more wedding days versus the first half of the year. This should give an impetus to shopping apart from a general boost in consumer confidence during the festive period,” Iyer said.
While commodity inflation in general remains benign, concerns about rising food inflation have been growing, said experts. Companies remain cautious about whether the mass end of the market will participate in the festive season this year, choosing instead to hold off on discretionary purchases like they have over the last few years.
Kamal Nandi, business head and executive vice-president of Godrej Appliances, said that while he sees a 40% year-on-year growth during the festive season this year, this will be led by premiumisation and the need to upgrade to better products. “The mass end remains soft, while premiumisation is strong. We are hoping entry-level consumers prioritise their purchases during the Dussehra-Diwali period when offers will be high,” he says.
Discounts, exchange offers, cashbacks, and easy financing schemes are expected to be high this year, says Nilesh Gupta, director of Vijay Sales, as brands and retailers look to draw more consumers into stores. Almost 35-40% of sales for durable companies come during the festive season alone, so the stakes are high, he says.
“During the regional festivals such as Ganesh Chaturthi and Onam this year, discounts offered were around 25-30%. During Dussehra-Diwali, this will increase to about 40-50%, going up to even 60-70% on some brands. While pent-up demand is there, retailers and brands will have to convert it into sales,” Gupta says.
From: financialexpress
Financial News
