Indian shoppers spent more time and money buying appliances, electronic goods, and jewellery in the past 30 days, celebrating the first festive season in three years without covid-related restrictions.
“Initially, we were concerned about entry-level demand even though mid and premium segments continued to grow. However, during the past couple of months, we witnessed sentiments have revived, and there was good demand across the range, including the low end. Premium products continue to show high growth,” said Deepak Bansal, vice-president of home appliances and air-conditioners at LG India.
Bansal said the company saw impressive growth rates, especially in sales of big-capacity washing machines, refrigerators, convection microwave ovens, and dual inverter air-conditioners.
Companies were worried that demand for entry-level goods could suffer as low-income households grappled with soaring inflation after being the worst hit during the past two pandemic years. While the market for premium and luxury products was least affected by the pandemic, entry-level goods took a hit. But companies said that had changed now, with demand emerging for low-end goods as people refresh their homes and wardrobes after two years.
Retail intelligence firm Bizom said demand for fast-moving consumer goods (FMCG) dipped in September from August but revived in the end of September and early October. FMCG sales from 26 September to 5 October rose 15% in terms of value from the preceding 10 days, the company said.
“It does seem that no amount of inflationary headwinds, irregular monsoon and the earlier pandemic worries can prevent us from celebrating festivals in all splendour. After having seen trends of revenge shopping and revenge tourism, it does seem like we’re in the middle of revenge festivities,” said Akshay D’Souza, chief of growth and insights at Bizom.
Biscuit-maker Parle reported a “significant” uptick in sentiment since mid-August, starting with Rakhi, stretching to Onam and Ganesh Chaturthi. Krishnarao Buddha, senior category head at Parle Products, said consumers are stepping out, shoring up demand for gifting packs.
“The industry is in for a good season,” he said. The firm expects festive season sales to slightly surpass 2019 levels, he said.
Meanwhile, jewellery retailer Tanishq said early trends point to good sentiment towards gold purchases. Prices moderated slightly from their peak in March, though they have inched up slightly.
“The mood for gold is very strong. Maybe because gold prices have moderated; of course, it’s again started going up largely on the dollar-rupee relation. Generally speaking, for customers, this is probably a good enough time to buy gold,” said Ajoy Chawla, chief executive of the jewellery division at Titan Co.
Chawla said purchase ticket size growth in the first half of the festive period has been encouraging. “Metros are doing better. The growth in ticket size indicates there is a segment of customers who are not impacted by inflation,” he said.
To be sure, he added that some segments of customers are deferring big-ticket purchases. This was visible in the number of buyers in the market, which he said was growing slower than the previous year. The company has spent ₹35 crore in marketing campaigns on Tanishq, its flagship jewellery brand, this season.
Industry body Consumer Electronics and Appliances Manufacturers Association said sales for electronics and home appliances accelerate significantly four to five days before Diwali.
“There’s been an uptick in demand. Post-summer, sales of entry-level products had come down,” said Eric Braganza, president, CEAMA. This trend, said Braganza, continues to remain pronounced.