The Hindu Business Line : Festive fervour

The festive season has gotten off to a good start, what with manufacturers and dealers pulling out all the stops to garner a greater share of the consumer's wallet.

If the fervent celebrations for Ganesh Chaturthi and Dussera are any indication, this festive season has certainly gotten off to a good start. After two dull seasons, manufacturers and retailers are looking forward to tapping the pent up demand at the consumer's end, and consumers, too, seem ready to oblige.

A dipstick poll conducted by Businessworld-NFO in six major cities indicates that with disposable incomes up by 10-30 per cent, festive spends are also likely to go up, particularly on big-ticket items such as colour televisions, music systems, washing machines and two-wheelers; mobile phones with cameras are another must-have item this year. With the Mumbai blasts behind them, the rollout of the Conditional Access System put on hold, and the general mood declared upbeat after a good monsoon, manufacturers and dealers of consumer durables are pulling out all stops, with promotional offers, lucky draws and discounts, in a bid to garner a greater share of the consumer's wallet. Not to be outdone, jewellers and apparel makers have also got into the act, with special collections and designs at every price point imaginable.

With a wide range of options before them in terms of brands and places to shop at, consumers are spoiled for choice: the NFO poll indicated that the average amount of purchase is likely to be the highest in Bangalore, while second-time buyers of durables such as TVs, music systems and air-conditioners would be the highest in Delhi. Significantly, these are not replacement purchases; rather, they are second purchases, indicating that several durables have evolved from being shared `family' items to `individual' items.

While the ICC World Cup earlier this year boosted sales of colour televisions, manufacturers expect that demand will be high this festive season, as well. Rapid advances in technology and an equally rapid price erosion have ensured that flat-screen TVs, DVDs and Home Theatres become desirable — as well as more affordable than they were a few years ago.

"Flat screen TVs are, in fact, the fastest growing segment, while large screen TVs are also growing very rapidly," says Aslam A. Karmali, Head, Consumer and Trade Marketing, Consumer Electronics, Philips India Ltd. "DVD players are also growing exponentially because of rapid price erosion, and the broader consumer base that it has brought: it used to be only SEC A, now it's also SEC B. And then there's Home Theatre, which is also booming because of newer products and promotions."

Videocon has a Diwali Phataka offer on its products, while Godrej has a Har Din Dhamaka promo on its entire range. Onida has a scratch-card promo in the Northern and Central markets, and an offer of free headphones — Onida Ghar Pe, Headphone Sar Pe — on a select range of televisions, nationwide.

Most companies have stepped up their ad spends by 20-25 per cent this festive season, and expect a significant increase in sales. Onida's target for this season is 3.2 lakh colour televisions (as compared to 2.3 lakh units last year), 25,000 washing machines and 8,000 DVD players, according to V. Chandramouli, Vice-President, Sales, Marketing and Service, Mirc Electronics. "Today, replacement cycles are much shorter, and the consumer doesn't buy only when something stops working — there is also the pull of wanting something newer and better. And, products like microwave ovens, air conditioners and washing machines also have strong emotional benefits in addition to functional benefits, so consumers are easily convinced to spend on them," he adds.

However, a buoyant stock market may prove to be a bit of a party pooper, say some retailers: "People are putting their money in the market, so they won't spend more than what they did the last year," says Sanjay Sahjwani of Om Electronics, a Samsung Electronics retailer in South Mumbai. He estimates that an average South Mumbai family sets aside about Rs 15,000 for durables, and will not exceed that budget this year.

While festival budgets have been growing over the years, the steep price erosion has also meant that a family is able to buy more within that budget, or upgrade — buy a 27-inch TV instead of a 21-inch TV, he adds.

So, the mood is expectant and the stores are all bustling: the newer large-format stores such as Lifestyle, Pantaloons, Westside and Shopper's Stop wear a festive look and are beehives of activity, especially on weekends. The men folk can usually be found at the in-house coffee shop, while the harried women flit from the kids' section to the men's section to the women's section and back.

Shopper's Stop has a special promotion for its First Citizen members, `Earn your stripes,' where members who shop for Rs 25,000 and above get a complementary Mont Blanc pen. It is also running a Durga Puja festival in Kolkata, the `Buy and Fly to the Seven Wonders' offer, where purchases of Rs 1,500 give customers a chance to win a holiday. The store, in fact, gets a head start to the season with `Parikrama' during the monsoon, which is usually an off-season. Featuring different themes, such as `Bollywood' and `Mela,' the store also creates special lines of merchandise under its private labels, `Stop' and `Kashish.'

Across its 13 stores, Shopper's Stop registers an average of 85,000 footfalls per day during festive, and rings up bills of between Rs 1,200 and Rs 1,500 per customer, with a large chunk of customers also stepping up to Rs 4,000, according to Sanjay Badhe, Director- Operations, Shopper's Stop. Besides apparel, gifting is also popular, and shoppers tend to buy perfumes, jewellery and other items from the home section for gifts, he adds. "At the start of the retail evolution, customers valued conveniences such as wash rooms, air conditioning, parking and large spaces," Badhe says. "These, today, are seen as `hygiene' factors by customers, (and so) we constantly monitor customer satisfaction and create service standards in terms of people, easier and faster cashiering and high levels of convenience."

Can any festival be complete without our favourite metal, gold: about a quarter of all jewellery sales happens during the festival season, and higher gold prices and the blast at Mumbai's Zaveri Bazaar have not dampened demand for the yellow metal this season. Most branded jewellers have launched special collections and offers, and are advertising heavily, and even large traditional jewellers, such as Tribhovandas Bhimji Zaveri, Popleys and Mhapralkar's in Mumbai, have introduced special collections and gift schemes.

There are certain auspicious days, like Dussera, when purchase of at least a gram of gold or silver is regarded as essential. On Karva Chauth, which falls about a week to 10 days before Diwali, women observe a fast for the well-being of their husbands, and are rewarded with gifts of jewellery by their husbands and mothers-in-law. Dhanteras, which falls just before Diwali, is another auspicious occasion for buying gold, and many Hindus make investments or start new ventures on this day. On Diwali, too, people gift gold coins to friends and relatives, in the belief that, by doing so, they are ensured of wealth and prosperity for the rest of the year. In Maharashtra, the last day of Diwali, celebrated as Bhai duj or Bhai Bij is also an occasion for brothers and sisters to buy gifts for one another.

According to the World Gold Council, which has attempted to synergise efforts of various jewellers and promote gold buying during and before the festive season, jewellers are seeing more people walk into stores and buy jewellery off the shelf. India is the world's largest consumer of gold jewellery, and while the new, branded players are fast becoming popular, especially among younger consumers and working women for everyday and party wear, consumers still go back to their traditional jewellers for festive purchases.

At Mumbai's S.G. Mhapralkar Jewellers, for instance, traditional shami leaves and coins and vala of gold are popular as gifts during Dussera and Diwali, according to Anand Mhapralkar, a partner. The leaf, weighing 0.33 gm to 3 gm, is priced at Rs 250 to Rs 2,000, and the vala, weighing 0.5 gm, is priced at Rs 600 to Rs 6,000. Consumers, typically, spend Rs 4,000 to Rs 6,000, with bigger spends on necklaces and chains, he adds. "This year, gold prices are high, so we don't expect to see higher sales than last year, but the overall sentiment is also high," Mhapralkar says.

Even the premium precious metal, platinum, is in demand: India is one of the priority markets for the Platinum Guild, and the number of outlets where platinum jewellery is sold has grown from 12 in two cities to 150 outlets in 32 markets in just three years. Younger women looking to alternatives to traditional gold jewellery have largely fuelled the growth, with consumers looking for distinct jewellery for separate occasions.

Still, while the lavish Diwali parties of the rich and famous will be splashed across Page 3 and the TV headlines this year, too, for the average middle-class consumer, the festival is — with all its associations with joy and giving — another tough exercise in balancing the household budget. "Even the basic clothes, sweets and crackers cost a lot more these days," says Vasanthi S., a housewife in suburban Mumbai. "So we find our festival budgets going up every year." But those concerns will be forgotten — at least momentarily — as crackers and diyas light up the night sky, and the table groans under the weight of sweets and gifts, even as friends and relatives ignore the high telephone tariffs to greet you.

Pictures by G.R.N. Somashekar

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