Demand for consumer goods increases by up to 15% in Navratri
The companies said sales would have been much better in a constant supply situation. Demand is more for high-end products such as high-end smartphones, big-screen TVs and larger refrigerators, resulting in record sales of electronics and smartphones by Navratri.
Navratri operated from October 7-14. Shortages are also greater in the premium segment. Even categories such as beauty and sportswear reported an increase in their activity from pre-Covid levels.
Automakers such as Maruti Suzuki, Tata Motors and Mahindra & Mahindra are seeing strong double-digit growth in booking momentum compared to last season. However, dealers say retail sales have been hit due to production issues as consumers want a specific delivery date, also during the holiday season.
“Last year pent-up demand boosted sales during the holiday season,” said Deepak Bansal, vice president of LG Electronics, India’s largest home appliance maker. “This time, it’s more regular festive purchases, a healthy sign of positive consumer sentiment. In fact, if supplies were constant, growth would have been much higher. ”
Shashank Srivastava, senior executive director of sales and marketing at Maruti Suzuki, India’s largest automaker, said inquiries and bookings rose 15 to 16 percent as retail sales were down a similar level due to insufficient supply. “The rebound in demand is compromised by the disruption of supply,” he said. “The availability of models can potentially have an impact on the dynamics of reservation. ”
Despite the challenges, LG increased its sales of Navratri by 15%. Smartphone maker Realme said it recorded sales of Rs.3,500 crore in the nine-day period from October 2.
Mahindra secured reservations for 50,000 units of its latest model XUV700 within hours with a cumulative non-showroom value of nearly Rs 10,000 crore.
Realme India Managing Director Madhav Sheth said positive consumer sentiment is coming back strong and the smartphone industry is expected to register healthier demand this year. Realme plans to sell 6 million handsets.
Electronics retailers such as Tata-owned Croma, Vijay Sales and Great Eastern Retail saw sales growth of up to 30% compared to Navratri last year.
Avijit Mitra, Managing Director of Croma, said consumers are improving their products. “The supply chain continues to be irregular and, for some products, demand exceeds supply,” he said. “We expect this rate of growth to continue throughout the holiday season as general consumer sentiment is optimistic in most markets.”
Road to renewal
Navratri is the first stop in the month-long holiday season – the biggest drinking season in the country, accounting for over 35-40% of annual sales for several categories. The recovery in demand is a crucial indicator of the economic recovery, which is improving month by month after the deadly second wave of Covid-19.
Industry executives said the rise in consumer confidence was due to lower infections and increased vaccinations, festive bonuses paid by government and private companies, the record stock market, sales month on Amazon and Flipkart and corporate promotional offers. This was also reflected in footfall gradually approaching pre-pandemic levels in shopping malls.
Navratri sales grew 3-4% from 2019 sales in beauty, sportswear, athletics and alcohol, while flagship mall retailers such as H&M and Zara have reached pre-pandemic levels, said Yogeshwar Sharma, managing director of Select Citywalk CEO, one of Delhi’s main shopping malls.
Automakers and electronics companies are preparing to ramp up production in October to ship as much inventory as possible to dealerships, to maximize festive sales after production was hit in August and September due to outages. component supply.
Prices for smartphones and consumer electronics have increased by a record 15-20% this year compared to 2020. Cars are 5-10% more expensive due to the increase in component prices in a context of global scarcity, raw material inflation and unprecedented shipping rates due to the availability of containers. is weak.
Efforts to meet demand
When prices go up, consumers tend to drop prices, which hasn’t happened this month, said Nilesh Gupta, director of Vijay Sales. Even in automobiles, demand is more for more expensive models in all segments – those above Rs 7 lakh and sport utility vehicles.
However, Vinkesh Gulati, president of the Federation of Automobile Dealers Associations, told ET that the Navratri festivities did not meet dealers’ expectations.
“Two-wheeler sales remain sluggish due to cost skyrocketing by over 25% in recent years,” he said. “Although the demand for passenger vehicles is high, the segment has been affected by the lack of availability of cars due to the global shortage of parts. What’s concerning is that potential buyers expect specific delivery dates to close bookings, and that’s difficult to commit to now.