New Delhi: Demand for consumer goods and personal care products has picked up ahead of the peak Diwali shopping season, after clocking dull sales in the first few months of the fiscal year.
“The outlook is getting stronger by the day,” said Nilesh Gupta, director at electronics retailer Vijay Sales. Demand is especially higher for large-screen televisions as more people prefer them to watch the ongoing cricket World Cup, Gupta added.
The retailer could end the festive season with a strong double-digit growth in sales compared with a year ago. “If India reaches the World Cup final on 19 November, we will see a mini-Diwali continuing well beyond the festival that falls on 12 November,” he said. “We also lost out on summer due to unseasonal rains. Consumers seem like they are in the mood to spend,” he said. Zero-interest loans and longer repayment periods have encouraged more people to purchase premium appliances.
The country’s festive season, which stretches from Onam in the South to Durga Puja in the East, followed by Diwali, is a busy time for consumer goods makers as shoppers upgrade their wardrobes, buy new home appliances and spend on gifting items. According to Arnab Roy, vice-president, marketing for Coca-Cola India and south-west Asia, consumers are willing to spend more now, following the hardship and restrictions of the covid pandemic. “You will see this trend play out over the next few years. We expect this year to be the same. That people will spend money across categories honestly is what our expectation is,” Roy said. However, Roy said inflation has been a cause for concern the world over. “That’s why in our business, affordable packs are going to be very important,” he added.
On Friday, the Confederation of All India Traders (Cait) said it expects consumer spending this festive season to touch ₹3 trillion, up from last year’s ₹2.5 trillion.
September data on fast-moving consumer goods (FMCG) from retail technology platform Bizom indicated strong pre-festive stocking, especially in rural markets. Sales of FMCG were up nearly 5% in September versus a year ago; but down 2.3% year-on-year for the September quarter. Quarterly sales growth was affected mainly on account of lower demand for branded commodities and beverages. Home care products saw an uptick in sales, while confectionary and packaged foods saw greater levels of stocking by retailers, according go Bizom.
Cosmetics brand Sugar said early signs from Durga Puja buying have been encouraging; the brand expects the trend to continue through the rest of the season.
“The last three days in east India, where pujo shopping has started, have been phenomenal. We’re expecting this same festive rush to come for north and west over the next three weeks and for the south, it happens in November-December,” Vineeta Singh, co-founder & CEO, Sugar Cosmetics said.
On the durables side, analysts at Jefferies said demand for white goods in September improved from August. “Channel checks indicate improving m-o-m demand over July-September (2023). 15th August sales saw good offtake. Most dealers are positive about the upcoming festive season. Excess air-conditioner channel inventory has now been liquidated. Most other products carry normal inventories,” they said, adding earlier months saw weak consumer sentiment.
Kamal Nandi, business head and executive vice-president, Godrej Appliances, said Onam sales were good with premium segments such as AC and frost-free refrigerators doing well. “We are hoping for the momentum to continue with Durga Puja, Navratri and Dussehra in October, all the way till Diwali in November,” he said.
He added that there are fears, though, that this year’s erratic monsoon may hurt rural demand.
The first quarter of this year was dampened in some geographies due to unseasonal rains, Nandi said. “The uneven and deficit monsoons may impact some geographies more than others and the consequent impact on inflation may impact mass in rural areas. In general, upmarket territories and mass segment remains sluggish but the premium segment continues to demonstrate a good run,” he added.
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Updated: 17 Oct 2023, 12:26 AM IST
