As consumers finished last-minute festive shopping on Sunday, companies selling clothes to smartphones, whitegoods and automobiles are estimating up to 50 per cent more sales between Navratri and Diwali this year compared with last.
For auto and electronics manufactures, the growth this season has been the fastest in more than a decade.
Industry executives attributed this surge in demand to the sweeping GST reductions that came into effect on September 22, the first day of the Navratri festival, as well as income tax rate reductions that left more money in the hands of the middle-class, and discounts and promotional offers run by the manufacturers.
India’s largest car maker, Maruti Suzuki, delivered about 325,000 vehicles between September 22 (when the Navratri festival started) and October 18 (Dhanteras), an increase of 50 per cent over the same period last year. The company in the past month received 450,000 bookings, of which 94,000 units were for small cars.
“We are receiving about 14,000 bookings every day. While demand is strong across categories, it is more for vehicles in the 18 per cent GST bracket than 40 per cent, indicating positive consumer sentiments in the mainstream market,” senior executive officer (marketing and sales) Partho Banerjee said, adding: “This festive season is going to beat all records.”
Several Maruti Suzuki dealers booked large grounds to accommodate customer requests for deliveries on Dhanteras and Diwali this year. Each of them also hired 3-4 priests to help buyers do the pujas before taking delivery of their vehicles.
Hyundai Motor India delivered 14,000 units on Dhanteras alone, 20 per cent more than last year. Tata Motors is estimated to deliver more than 25,000 vehicles during the Dhanteras-Diwali period, 30 per cent growth over the same period last year.
GST 2.0 has brought in a new set of customers to the market, said Shailesh Chandra, managing director of Tata Motors Passenger Vehicles and president of the Society of Indian Automobile Manufacturers.
“After the tax cuts, vehicles have become more affordable,” he said. “Several cars have come within the budget of those customers who were earlier not thinking of buying a vehicle. Several other customers are opting for a higher variant at the same price (that a lower variant previously had).”
Hyundai Motor India has seen robust festive-season traction, with demand accelerating sharply from Navratri and continuing through Dhanteras, chief operating officer Tarun Garg said. “This is supported by GST 2.0 reforms, tax and repo rate reliefs and buoyant consumer sentiment.”
Till the GST cut, sales for most categories such as cars, electronics and apparel had been subdued for the last 8-10 quarters. The demand rebound also led to 15-20 per cent growth in festive sales at retailers such as Reliance Retail, Lifestyle International, V-Mart Retail, Vijay Sales and Great Eastern Retail, industry executives said.
Smartphones
In smartphones, market tracker Counterpoint Research says festive sales will grow 16-18 per cent by value and 9-10 per cent by volume. It had initially forecast 8 per cent value growth and a 4 per cent volume expansion.
Tarun Pathak, director of research at Counterpoint, said there was a bit of slowdown after the first online sales around Navratri, but demand bounced back in the last five-six days, especially in offline retail. “Consumer finance has taken a big leap this year,” he said.
Apart from smartphones, categories like televisions, ACs, refrigerators and washing machines have shone this festive season, though there was no GST cut on most of them. Godrej Appliances said its festive sales grew by over 50 per cent in value and 45 per cent in volume, while at Haier, sales expanded more than 45 per cent. For both companies, the sales growth this festive season was the fastest on record.
“The best part is the entry segment, which was affected for the last five years, has revived with categories like single-door refrigerator and semi-automatic washing machines growing by 30-40 per cent,” said Kamal Nandi, head of the appliances business at Godrej Enterprises.
Premium products, however, still drove sales across companies growing at a higher pace.
LG Electronics India chief sales officer Sanjay Chitkara said the GST benefit encouraged consumers to opt for more aspirational products.
Haier India president Satish NS said the backlog of the year due to a poor sales till September 21 has been almost wiped off by the festive demand, though rural markets picked up late due to heavy rains and flood in many places.
Western wear in demand
Sales recovered strongly after eight-nine quarters for apparel brands and retailers.
Devarajan Iyer, chief executive officer at departmental chain Lifestyle International, said there has been 15-20 per cent growth led by western wear and non-apparel such as handbags, shoes and fashion accessories. “The less than ₹2,500 segment has grown over 20 per cent,” he said. For pricier items, the growth was in a single digit.
