India Inc hopes to strike gold this festival season

Meenakshi Verma Ambwani, S Ronendra Singh New Delhi | Updated on October 06, 2021

But supply-chain worries, especially chip shortage, persist

India Inc is hoping to strike gold during the upcoming festival season seeing a strong consumer sentiment compared to last season across categories such as consumer durables and automobiles. While the demand trends are expected to be robust, companies are already grappling with supply-chain challenges, especially due to the semi-conductor shortage.

The consumer durable industry is gearing for a double-digit growth. Eric Braganza, President, CEAMA (Consumer Electronics and Appliances Manufacturers Association), said the industry expects to see a growth of 15-20 per cent over the last festival season despite the surge in freight costs and supply chain issues.

Kamal Nandi, Business Head and Executive Vice-President, Godrej Appliances, said: “Overall, the consumer sentiment is better than the last festival season supported by positive economic indicators. We expect to see double -digit growth this season. But the biggest challenge will be on the supply side. Early purchase decision will help consumers as there could be short supply situation in November depending on how the situation evolves.”

Industry players said that while the semi-conductor chip shortage will impact the electronics product segment, the recent power-crisis in China impacting factory production is likely to impact components availability for the consumer durables sector in November.

Crucial for auto industry

For the automobile industry the festival season is crucial to turnaround in fortunes and kickstart a sustainable recovery. Shailesh Chandra, President, Passenger Vehicles Business Unit, Tata Motors Ltd said, “The demand for cars and SUVs is expected to remain strong this festival season; however, the supply situation for electronic components may continue to be challenging.”

“There is momentum in the market with improved buying sentiment. However, the supply chain hurdles, including the widespread chip shortage, has been a big challenge. We will continue to align our production through our best efforts to tide over this shortage in the coming months,” said Rajesh Goel, Senior Vice-President and Director-Marketing and Sales, Honda Cars India Ltd.

E-comm sales on

With the festival sales of e-commerce giants Flipkart and Amazon already on, market research firm, Forrester expects online retailers to generate $9.2 billion in sales in the 2021 festival period, up 42 per cent over 2020.

No wonder, smartphone companies have set higher sales target. Madhav Sheth, VP and CEO of realme India, Latin America and Europe, said, “realme India witnessed nearly 4 million smartphone sales in September 2020. This festival season, we are expecting minimum 6 million smartphones and 2 million AIOT sales. We expect strong revenues from the premium segment too.”

The festival and wedding seasons are also critical for jewellery players. Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers, said the organised segment has been experiencing strong tailwinds over the last 3-4 quarters. “Gold has always been a preferred saving option and in the post Covid-19 era, it has also emerged as the safest and most lucrative long-term asset. We are highly optimistic of a positive momentum. We believe the pace of demand recovery will continue to speed up and expect this to continue throughout the festival and wedding seasons,” he added.

With inputs from Garima Singh

Published on October 05, 2021

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