KOLKATA | MUMBAI: Sales of apparel, smartphones, electronics and consumer products grew about 7-9% during Diwali thanks to last minute shopping, giving brick and mortar retailers a strong finish to their make-or-break festive season.Most consumer goods makers and offline retailers had been cautious about business during this year’s festive season due to a slowing economy and poor consumer sentiment in both urban and rural India over the past three quarters.While purchase of entry-level products expanded at a slower pace, most retailers reported higher demand for mid-to-premium products, indicating lower-income buyers may have either postponed shopping or shifted to discount-led online portals. Also, wide availability and penetration of consumer finance boosted average transaction size.Consumption patterns have shifted, said Kishore Biyani, founder of Future Group, which runs chains such as Big Bazaar, Central and Brand Factory. Average Billing upFrequent shoppers were outnumbered by those seen as more conservative and typically don’t splurge as much.“Fashion did really well with Central exceeding our expectations,” he said. “Having a loyal customer base, which was supported by Future Pay and cashbacks was a huge advantage to us which helped us immensely this time. Even within packaged consumer goods, gifting segment did brisk business especially at smaller stores such as Easy Day.”Retailers and companies had reported better demand even during the Navratri-Durga Puja-Dussehra period with sales growing 7-8% over last year while Onam sales had reported 3-4% growth on a lower base due to floods in Kerala last year. As a result, overall festive sales grew 5-7% this year.71798714 Diwali and overall festive season sales were much better than initially anticipated, said Brian Bade, CEO of Reliance Digital, India’s largest smartphone and consumer electronics retailer.“There was some pessimism, but at the end we are very happy,” he said. “Performance was much better than last year — same-store sales went up in double digits, average billing went up with brisk demand across categories.”Puma India managing director Abhishek Ganguly said Diwali pointed to possible recovery in retail considering traffic in malls was better than in August and early September despite record sales by ecommerce marketplaces.While footfalls were similar to those last year, sales rose as the average shopping basket was bigger, some retailers said.“There was a high single-digit growth on a like-to-like basis compared to last year Diwali period. We have not seen slowdown in apparel sales yet. Also, the growth was largely driven by an increase in average billing size while the walk-ins were similar to last year,” said Vasanth Kumar, managing director at Lifestyle International, the country's biggest department store chain. “Post Diwali, there is a seasonal change and stores will (get) winter stock, which allows us to liquidate autumn collection at discounted prices.”While OnePlus clocked Rs 1,500 crore in sales from Navratri to Dhanteras, Xiaomi had said it sold more than 500,000 smart televisions in the same period apart from a record number of smartphones. Realme said it sold over two million smartphones.Diwali was a crucial period since sales of most categories had been flat or had declined this year due to poor consumer sentiment. A fortnight ago, the International Monetary Fund (IMF) slashed its economic growth forecast for India to 6.1% for the current fiscal from its July projection of 7%, citing weaker-than-expected outlook for domestic demand.Arvind Fashions managing director J Suresh said Diwali sales grew more than 9% while the overall festive season growth stood at 5-6%. Arvind Fashions sells brands such as Gap, Arrow, Tommy Hilfiger and US Polo Assn.In smartphones and electronics, retailers and brands said sales have grown 6-8% from last year. The relatively lower pricing of Apple’s new iPhone 11 and up to 30% price cuts in televisions boosted demand, with consumer finance schemes adding to the buoyancy. The latter’s contribution to overall sales went up to 75% compared with the usual 55-60%.“There was no doubt some impact of negative sentiments since the number of shoppers who bought this year was lower than last year. However, those who purchased did of a higher value, boosting overall sales,” said Vijay Sales director Nilesh Gupta, adding that sales grew 8%.Overall appliance sales went up by 6-7% with a clear shift toward premium products with little traction for entry-level products, said Vishal Mewani, director of Mumbai’s leading chain Kohinoor Electronics. The festive season — from Onam in Kerala to Navratri-Durga Puja-Dussehra, Karva Chauth, Dhanteras and Diwali — is the biggest shopping period in the country accounting for almost 35-40% of annual sales of most consumer facing companies.
from Economic Times https://ift.tt/347EKxM
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