According to preliminary data, Indian consumers are enjoying everything from cars, homes and television sets to travel and jewellery, in the festive season that began last month, boosting growth prospects despite economic slowdown elsewhere in the world .
Online and offline sales during the Hindu festival period starting from the last week of September to the beginning of November are projected to cross $27 billion, almost double the amount in the same pre-Covid period in 2019, and nearly 25% over the previous year. % is more. According to industry estimates.
According to the Confederation of All India Traders (CAIT), the sales will include around $15.2 billion in offline sales, compared to about $8.5 billion in 2019. According to market consultancy RedSeer, online platforms like Amazon and Walmart’s Flipkart will also see sales of $11.8 billion this year.
Retail sales always peak during October-November, when the country of 1.4 billion celebrates the major festivals of Dussehra and Diwali. According to Hindu belief, it is also an auspicious time of the year to get married.
But the jump this year is huge, mainly due to slackening demand from COVID-19 two years after ravaging the country, as well as a rise in wages and a surge in jobs as the economy recovers, industry leaders said. Told.
“After two years of pandemic fatigue, Indian consumers are excited for festivals,” said Sanjay Kothari, associate partner at Redseer, adding, “Online sales grew by almost a fifth in the first week of the season compared to last year.
He said the number of online shoppers has quadrupled to nearly 200 million since 2018 and the demand for items such as mobile handsets and fashion garments is increasing in smaller cities, with such sales expected to remain strong for at least the next three months. is likely to.
Manoj Kumar Das, 53, a tea vendor in the eastern state capital Bhubaneswar, said, “We haven’t been out of the city since the COVID outbreak, but decided to have some fun during festivals this year. ” Orissa.
Das, who earns around Rs 30,000 ($364) a month, said he spent more than Rs 50,000 on a seven-day vacation this year besides buying new clothes for his family.
Auto sales, including two-wheelers, rose 57% during the nine most auspicious days in the Hindu calendar this month compared to last year, and were almost a fifth higher than in the pre-pandemic period in 2019, according to the Federation of Automobile Dealers Association. .
Graphic: India-economy/movanxaqepa/India’s consumer confidence on the rise in the Indian Consumer Confidence Index. png
A report by JLL Consultancy said that in the top seven cities of the country, home sales in the September quarter grew by nearly 70% compared to a year ago, as builders offered festive discounts.
The boom in India comes despite economic challenges elsewhere in the world, with widespread inflation and increasingly high interest rates following the Russo-Ukraine war.
The IMF has said that countries representing a third of global output are expected to be hit by recession next year.
In India too, lending rates have risen by nearly 150 basis points since May as the central bank worked to combat consumer inflation, which hit a five-month high of 7.41% year-on-year in September .
But economists said there was a feeling in India that inflation was at its peak when economic activity was picking up. The boom in consumer demand is expected to support economic growth of around 6.5% in the fiscal year ending March 2023, the highest among the world’s major economies.
Clothes, jewelry and cars
Delhi’s Chandni Chowk textile and jewelery markets and retailers in the states of Uttar Pradesh, Gujarat, Odisha and Kerala reported a sharp increase in demand, especially in urban areas. Traders said, however, that rural demand remained weak due to lower wage growth than in cities, and possibly unseasonal rains in October that affected crops.
Malav Shah, director of VTech TVS, a chain of six automobile showrooms in Ahmedabad in western India, said the reopening of educational institutions and resumption of work in offices is driving the demand for autos.
“Rise in vehicle prices and high petrol prices are challenges, but they have not dampened the festive sales,” Shah said.
Credit expansion is also boosting spending, which hit a 10-year high of 16.2% in August, as firms and consumers took loans to invest and purchase, according to the central bank.
Graphic: Credit demand growth india-economy/lbvgnqxwypq/Credit demand growth. png
The retail boom is also a boon for the government – Goods and Services Tax collections, a barometer of consumer demand, rose 26% year-on-year in September, the data showed.
Praveen Khandelwal, general secretary of CAIT Group, which represents over one million retailers, said sales were expected to grow by around 70% as compared to the pre-pandemic period as people buy clothes, gold and household items to celebrate and celebrate festivals. Spending more on decorations. for the wedding season.
“Consumer confidence has improved with the expansion of economic activities, and the country will celebrate the festival after two years without any pandemic scare,” he said.
Aditi Nair, chief economist at rating agency Moody’s’s India arm ICRA, said the rise in festive sales partly reflects subdued demand, but may ease by early next year.
“After two consecutive festive seasons, consumer sentiment and spending have improved this year … which may spur economic growth in the current quarter, but may not last after that.”
($1 = 82.3900 Indian Rupee)
(Additional reporting by Jatindra Das in Bhubaneswar, Sumit Khanna in Ahmedabad and Jose Devasia in Kochi; Editing by Raju Gopalakrishnan)