Indian retailers could see a bumper festival season this year, with sales outpacing even pre-pandemic levels, as consumers unleash their pent-up demand in the first real shopping period free of Covid-19 restrictions in 2.5 years, industry experts told DH.
That’s good news for Asia’s third-largest economy, which saw a significant drop in consumer demand after the pandemic hurt household incomes and inflationary pressures forced many to cut back on their discretionary spending.
“Receding risk of a pandemic, pent-up demand and improvement in footfalls will help the sales to be stronger and ahead of pre-Covid levels in the upcoming festive season,” said Kaustubh Pawaskar, an analyst at Sharekhan by BNP Paribas.
While the pandemic forced many Indians to move their shopping online for safety and convenience, retail experts expect the rising tide to lift all boats this season, with e-commerce chains and brick-mortar stores expected to gain from the consumer’s willingness to spend.
Naveen Malpani, the national leader of consumer and retail practice at Grant Thornton, said the revenue growth could be as much as 25% this season, which will last until mid-November.
“We had a lot of inflation initially, but those things are easing out a bit. This will definitely help in boosting rural consumption as well,” Malpani told DH.
Almost 83% of the respondents surveyed by consulting firm Redseer indicated willingness to buy this festive season. The optimism is not just limited to consumers but also sellers, the survey found.
Many sellers are launching new products, hiring more temporary workers and offering compelling deals as they expect higher sales.
There is a lot of pent-up demand among people in higher-income and middle-class households and they will indulge in what experts termed “revenge shopping” to make up for all the big and small luxuries they were denied during the worst of the pandemic.
Industry experts expect many Indian shoppers to splurge on apparel — a segment that was bruised badly during the pandemic — as many people worked from home.
63% plan to spend on fashion categories compared with 56% last year, while 53% of consumers intend to spend on electronics versus 44% last year, according to the Redseer survey.
“Consumer demand is typically seen during the festival season, and Indians tend to spend more on these occasions. I think there will be demand across the festival season,” said Malpani.
“We foresee a massive footfall during the Dussehra and Diwali festivals,” A spokesperson for Tata’s Croma electronics chain said, adding it expects sales to be at least twice of what they were last year.
Industry veterans see survivors of the pandemic spending on themselves and others.
“I think the beauty of this season is that while people will buy for themselves, they will also buy gifts for others because of a sense of thankfulness,” said Kumar Rajagopalan, CEO of the Retailers Association of India. Deccan Herald