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What Indians Bought Or Didn’t This Festive Season


Indians stepped out shop and celebrate during Diwali, the first festive season without the fear of the pandemic in three years. Sales of chocolates and consumer goods to appliances surged, and so did demand for credit and in-store spending. Yet, worries around inflation holding back demand persist.

Consumption indicators continue to show stress in the rural economy, which is still to recover from the income destruction of Covid-19 and the added pain on rising prices. Demand of premium products usually consumed by affluent buyers is growing, underscoring the twin-paced growth or K-shaped recovery.

BQ Prime analysed demand in key segments of the economy to understand how key sectors fared during this festival season.

More Indians lining up at stores to swipe their cards, than those sitting at home and ordering things.

According to data available with the Reserve Bank of India, credit card swipes at point-of-sale terminals rose 24% month-on-month to Rs 39,725 crore in October. From a year ago, that rose at 41%. In case of debit cards, the physical spends rose 15.4% month-on-month to Rs 38,227.5 crore in October.

Consumer goods sales rose during the festive season, driven by demand for food and chocolates. But shoppers resisted the urge to go beyond that.

Sales of consumer goods grew 10.6% over the previous year’s Diwali between Oct. 18 and 24, according to data sourced from Bizom. Sales in the first two-three weeks of October rose 5.6% over September and 5.2% over a year earlier.

This rebound after the September decline was led by commodities such as packaged wheat and rice to oil, chocolates and confectionery, according to Bizom. But demand for beverages and all non-food categories shrunk, shows data from the retail intelligence firm that tracks 75 lakh kirana shops.

“Premium brands are growing at a faster rate than the popular brands and popular brands are growing faster than the mass brands,” said Sanjiv Mehta, chairman and managing director of Hindustan Unilever Ltd.  

What that means is people with disposable income continue to spend, while others are not as resilient to inflation.

Read the full story here:

Diwali Splurge Also Bares Lingering Pain For Consumption In India

The K-shaped divergence was equally prevalent in the consumer durables sector.

Sales of entry-level appliances and electronic goods were muted this festive season in another indicator that the stress in rural markets is far from over.

“This Diwali, we saw a jump in sales of mid- and high-end products… about 25-30% in terms of volumes and close to 50% in terms of values,” said Eric Braganza, president of the CEAMA, the apex body for the Rs 75,000-crore consumer electronics and home appliances industry in India.

Sales of entry-level products, however, fell 10-15%, resulting in inventory piling up, said Braganza.

Electronics retail chains like Reliance Digital and Vijay Sales also reported growth driven by higher bill values and conversions as more and more customers visited their stores to avail attractive offers.

Read the full story here:

Diwali Surge For Premium Appliances Points To A Familiar Stress 

Two-wheeler dealers reported uneven demand across segments and regions, leaving many with inventory pile-ups for the second straight year in a row.

“The overall auto retail sales at festivals are expected to grow by a minimum of 40%, with two-wheelers growing in double digits compared with last year,” Manish Raj Singhania, president of the Federation of Automobile Dealer Associations, told BQ Prime. “But certain regions may have been impacted by the erratic rains, which were less than required in some places and stretched beyond the usual season in other areas, impacting agricultural income.”

Singhania expects sales during the festival season to rise 1% compared with the pre-pandemic period of 2019.

In the coming months, the dealers hope that increased cash flows in the rural economy from crop sales and demand during marriage season will boost sales, helping ease inventories.

Read the full story here:

Festive Season Leaves Two-Wheeler Dealers With Inventory Pile-Ups





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