* Consumption of home entertainment surged and many are upgrading to bigger TVs
* Demand for gold and diamond jewellery has witnessed a notable rise during the Navratri period
* Taj group of hotels has redesigned wedding banquets to meet Covid-19 safety regulations
This October, auto sales touched pre-Covid-19 levels, bringing cheer to the automobile industry in a year that has driven all sectors of the economy to despair. Homegrown auto major Maruti Suzuki India, for instance, reported sales of 1,63,656 units in the domestic market in October, up 18 per cent compared with the same month last year. The above-normal business during the Navratri holiday has raised hopes for an equally good show during the upcoming Diwali festivity — a time of new vehicle purchases traditionally.
“The demand is higher and bookings are steady... we expect the pent-up demand to last at least till December,” said RC Bhargava, chairman of Maruti Suzuki India, referring to customers who held back on new buys during the pandemic-induced lockdown period.
The second half of the year has always meant big business for consumer goods makers, thanks to the extended festival and wedding season. This year, the celebrations are expected to put the pandemic-ravaged economy on the path of recovery. However, industry observers point out that amid the widespread job losses, salary cuts and other uncertainties besetting the economy, customers may cut back on discretionary spends, except in a handful of categories.
According to the Festive Shopping Index 2020 brought out by the Retailers Association of India (RAI) — representing online and offline retailers — home appliances and electronic products, home furniture and apparel, among others, are likely to be in demand this festival season.
“Customers do feel the need to reconnect with a sense of cheer and are slowly coming out to shop,” says Kumar Rajagopalan, chief executive officer of RAI. But with a difference, he adds. More and more shoppers are depending on digital platforms, he says.
He cites the growth in demand for consumer durables and IT products, furniture, household and kitchen items after the lockdown was eased. Clothing and fashion have not been as lucky, but he sees signs of hope here too. “We believe that the festive season will bring some relief as customers may buy new clothes for the festivals,” he says.
For the consumer durables industry, robbed of the usual brisk summer sales of air conditioners and refrigerators owing to the lockdown, the festival season is crucial to recoup some of the losses.
With many people working from home to stay safe from the pandemic, sellers say there is a healthy demand for lifestyle-enhancing home appliances and gadgets, including refrigerators and washing machines. However, they also point to the supply constraints for products such as LED TVs and laptops.
“The demand for LEDs has surpassed supply, mainly due to the high sellout during the early months of unlock,” explains Manish Sharma, president and CEO of Panasonic India & South Asia. Consumption of home entertainment surged and many are upgrading to bigger TVs. His company saw a 30 per cent sales growth in air conditioners, refrigerators, washing machines and microwaves during the Navratri period compared to last year, he says.
Festivals and gold buying go hand-in-hand for many Indians. After months of lockdown, consumers are eagerly adding gold to their festival shopping list, says Asher O, managing director (India operations) of Malabar Group, the parent company of jewellery retailer Malabar Gold & Diamonds. The demand for gold and diamond jewellery has witnessed a notable rise during the Navratri period compared to the previous six months, he says. “We are looking to clock healthy growth in revenues during October and November. Our Dhanteras (the Diwali tradition of buying precious metals) booking offer has received a great response... shopping for gold during the festival period remains a part of most consumers’ way of life. Therefore it will not be a surprise to see gold demand recover much faster than other categories,” he adds.
Echoing this sentiment, jewellery retailer CaratLane’s founder and managing director, Mithun Sacheti, says they have had a good start to the festive season. “Our consumer business saw a 25 per cent growth in Q2 [July to September] and we are expecting a similar trend to continue through the festive season. With more consumers choosing to buy online, our online business saw a 90 per cent growth in Q2 and it will drive the growth during Dhanteras, too.” The wedding season, again, promises a rising demand for jewellery.
However, the World Gold Council, the market development organisation for the gold industry, has been cautious in its outlook and expects India’s gold demand to remain soft. As gold prices are expected to remain higher than last year’s levels in the coming weeks, consumers may not go beyond the minimal shagun purchases this festive season.
According to a report from brokerage firm Motilal Oswal Financial Services, demand for gold — including jewellery, bars and coins — during July to September 2020 was 35.8 per cent higher than in April to June 2020. However, compared to the July to September 2019 period, demand this year lags by 30.1 per cent.
Yet another sector that looks hopefully towards the festival and wedding season is the hard-hit tourism and hotel industry. “On the leisure side of the business, we have seen busy trends on weekends and extended holidays,” says Vibhas Prasad, director of The Leisure Hotels Group. Guests from North Indian regions, including the national capital region, Punjab, Uttar Pradesh and Haryana, have been driving down in their own vehicles with families and friends, he says.
Wedding venues are seeing a return to activity, too. “With the gradual lifting of lockdowns across states, queries for small and intimate weddings in Delhi have increased significantly,” says Gaurav Pokhariyal, senior vice-president (Operations, North), Indian Hotels Company Limited. In addition to safety and hygiene protocols for Covid-19, they have redesigned banquets, he says.
The company’s Taj group of hotels now have individual pre-plated portions to avoid sharing of food between guests, and seating arrangements follow physical distancing norms. Health declaration forms are a must, for guests.
Surely, these are times that call for marrying safety with gaiety.