Record Diwali Sales

Diwali has been traditionally a time of splurging for Indian consumers and companies look forward to this period.Last two years were subdued with the cloud of Lehman hanging over.This year the sun sparkled like never before.Most businesses have had a bumper time.There have been unprecedented sales of consumer durables,gold,cars,apparel and even DTH connections.A DTH company executive,I spoke to,revealed that they had signed up 40% more connections over last year in one month.Value retailers like Vishal and premium appliances both have never had it so good.The article below from ET gives an idea of the buoyancy sweeping the market.

Diwali retail sales rocket to new highs, up almost 80%KOLKATA|NEW DELHI: Retailers, carmakers, jewellers and other consumer goods and services companies have reported highest Diwali season sales, as consumers went on a buying spree across the country except in Punjab, where floods dampened demand.

Companies reported year-on-year growth ranging from 20-80% this season and remain confident that the high demand will last, with consumer confidence expected to stay high on the back of rising incomes, positive economic forecasts, booming stock market, rising asset prices and a good monsoon.

“Diwali sales were the best ever,” said Rakesh Biyani, CEO-retail at Future Group , India’s largest retailer, which recorded more than 20% rise in footfalls and a more than 25% jump in average bill size. “Good times are here to stay,” he added.

Retailers reported about 25% jump in average bill size, as demand for premium products such as flat-panel televisions, double-door refrigerators, fully-automatic washing machines, home theatres, branded gold and diamond jewellery, fashion apparel, imported gifts and branded furniture soared with consumers upgrading their household items.

“The fear mindset of consumers has completely vanished. Consumers have splurged like there’s no end,” said Sanjay Gupta, marketing head of Spencer’s Retail, which reported a 20% jump in average bill size.

The auto industry sold about 50,000 cars during the Dhanteras-Diwali week, driving almost 4-5 times growth in sales.
Maruti Suzuki , which sells every second car in the country, drained its entire inventory to dealers during Diwali.
“We estimate that more than 15,000 Maruti cars were delivered on Dhanteras day alone across the country,” said Shashank Srivastava , chief general manager-marketing, Maruti Suzuki.

The company sold a record 1.08 lakh cars in the domestic market in October and expects sales to be even better in November. The maddening customer rush was also seen at two-wheeler showrooms across the country. Market leader Hero Honda’s all three factories have been working overtime to meet the unprecedented demand as sales in October rose 43% to cross five lakh units in a month for the first time.

A Hero Honda spokesman said sales were better than despatches. “Our retail sales have already crossed the 5,50,000 mark during the period between the first day of Navratras and Diwali,” he said. “The festive period is still on, and we hope to add more numbers to this tally in the next few days,” he added.

The mood in the market is so bullish that despite a 24% jump in gold prices since last Diwali, leading jewellers reported anywhere between 40-80% growth in sales this year. “Growth has come from the medium-value items to the high-value categories,” said Mehul Choksi, CMD of Gitanjali Gems that owns D’damas, Nakshatra, Gili and Sangini brands. He said the company’s sales were 70-80% more than last year. Gitanjali has reported sales of around Rs 450-500 crore this festive season.

Other leading jewellers like Orra and Tanishq also clocked 40-50% growth in sales. Orra CEO Vijay Jain said apart from necklaces and bangles, solitaire sales have gone up dramatically by over 60%. Solitaires are more than one carat diamonds and in the Rs 3.5-5 lakh price bracket.

At Orra, average bill size went up by 26%, while Tanishq saw it growing by over 20%. “We have seen growth happening across all categories, particularly in diamonds,” said Bhuwan Gaurav, marketing head at Tanishq.

Typically, the festive season accounts for 20% of the annual sales for jewellers. In consumer durables, Korean duo of LG and Samsung, which hold the lion’s share of the market, recorded more than 40% rise in festive sales. So did leading Indian brands such as Godrej and Videocon.

“Sales were highest in October this year. Even smaller towns showed high demand for some of the premium product categories,” said Ravinder Zutshi, deputy MD of Samsung India . Steep fall in prices helped a spike in demand for premium items such as LCD and Plasma TV, Blu-ray disc players, camcorders and home theatres.

YV Verma, chief operating officer of LG Electronics India , said the only dampener was Punjab, which recently faced an adverse economic situation due to the floods. Punjab is among the richer states in the country, with high consumer demand, particularly in the festive season. This year, floods affected demand in the state.

The direct-to-home (DTH) satellite television sector too increased its subscriber addition by almost one-third this Diwali season, mainly due to a fierce price war and aggressive marketing by all the six companies and partly helped by a boom in television sales.

With new DTH connections now costing less than Rs 1,000, some 14 lakh people took such connections in October, taking the total consumer base to three crore. “The sub-Rs 1,000 pricing led to breaking of psychological barriers for consumers,” said Salil Kapoor, COO at Dish TV , the market leader with some 8.8 million subscribers. In the first five days of November, the industry added another six lakh consumers.

(With inputs from Chanchal Pal Chauhan & Meenakshi Verma Ambwani)


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