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The falling rupee does not bode well for consumer goods companies dependent on imports, especially with the upcoming festival season.
Goods such as televisions, apparel, footwear and even travel will get more expensive due to the weak rupee.
Videocon Industries, which imports almost 90 per cent of panels for its televisions from countries like Taiwan, Korea and China, is not looking forward to better days ahead.
CM Singh, COO, Videocon Industries says, “Sanity should prevail as the past two months have already been bad for the consumer durable market due to low consumer sentiment. The de-valuation of the rupee will have huge impact. We have been waiting eagerly for the festival season without having to go for major price revisions, which may be inevitable. This would add to the already low consumer sentiment. ’’
International apparel brands like Lacoste may also not have an option but to raise prices of its garments and footwear.
Rajesh Jain, Managing Director & CEO, Lacoste, says, “Our imports will get more expensive due to the falling rupee. We import products like footwear, bags and some percentage of garments. Despite taking yearly price hikes, we may have to have to add an additional 5-10 price hike for our affordable luxury brand.’’
However, footwear brands like Clarks, which sources almost 40 per cent of its products from India, is still waiting to take a call on pricing. S Ramprasad, CEO, Clarks, said: “There is not much cushioning for us since 60 per cent of our footwear is imported. The last two weeks with the yuan depreciating has already been bad but it is too early to take a call on pricing.’’
Even the travel to long haul overseas destinations may get impacted due to the falling rupee.
But short haul destinations like Dubai and Singapore may still have some travellers.
“There will be a slight drop in international travel but domestic travel will do well as the peak Diwali and Christmas starts. Short haul travel to destinations like Dubai and Singapore will not pinch travellers and even cruises in these destinations will get a boost despite the falling rupee,’’ observes Vijay Kesavan, CEO, Musafir.Com.
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