Pent-up demand and a sense of normalcy after two Covid-afflicted years brought much cheer to the consumer products makers this Diwali season. Players in consumer durables, automobiles, and jewellery sectors clocked strong double-digit growth over the previous season. Though in many sectors, this consumption boost was led by the premium segment and fuelled by urban markets while entry-level segment sales were a bit tepid.
Shashank Srivastava, Senior Executive Officer, Marketing and Sales, Maruti Suzuki India said, “Passenger vehicle sales during the festive season have been fairly good. We were able to deliver over 1.94 lakh vehicles, which is more than 40 per cent of last year’s festive period. However, this is lower than pre-Covid period as sales were partly impacted due to the shortage of semiconductors.”
Auto makers have sold an estimated 4 lakh passenger vehicles during the festival season up nearly 38 per cent year-on-year.
“For the festive period so far, our retail growth has been 43 per cent in FY23, compared to last year. Demand has been well supported this year with a significant ramp up in supply,” said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd.
A strong uptick in sales of premium categories backed by consumer financing schemes enabled the white goods industry to garner 10-15 per cent value growth. Satish NS, President, Haier Appliances India said the company garnered 30-35 per cent value growth year-on-year with a strong sales uptick in the mid and premium segments. “Urban regions and bigger cities led the growth. While we did see an uptick in sales in rural regions in the last four days upto Diwali but it was not as much as expected,” he added.
“We have seen good traction across product categories this festive season, especially in premium segments, such as high-capacity front-load washing machines, side-by-side refrigerators, and convection microwaves. Overall, we are witnessing good double-digit growth this festive season,” said Deepak Bansal- VP- Home Appliances & Air Conditioners, LG India.
FMCG sales spiked 10.6% this Diwali
Data sourced from Bizom, a retail intelligence platform that tracks consumer product sales across 7.5 million outlets
Nilesh Gupta, Director, Vijay Sales pointed out that good growth momentum was also visible for LED TVs, smartphones, laptops, small appliances, and smartwatches. “Premium segment saw maximum growth and we expect the growth momentum to continue till this weekend,” he said.
“Oppo smartphones saw a 28 per cent increase in Y-O-Y sales during the Diwali week,” a company spokesperson added. Navkendar Singh, Tech Analyst, IDC said, “We will see a value jump for a few brands in the smartphone segment since mid-range and flagship model sales have been good, even when mass segments face demand challenges.”
Jewellery players expect the strong growth momentum to continue through the wedding season.
“We witnessed good demand for jewellery during this festive season. Customer footfall at stores has increased compared to pandemic levels. Demand from urban markets has been good,” said Suvankar Sen, MD and CEO, Senco Gold & Diamonds. Aditya Pethe, Director- WHP Jewellers said sales during Dhanteras was up 20-25 per cent over last year.
Dhanteras jewellery sales up over 10% on sparkling rural demand
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Consumers shopped in larger numbers on e-commerce platforms, including from tier-1 and tier-2 towns. During the Big Billion Day sale, Flipkart clocked over 1 billion customer visits on the platform. Amazon India recorded 1.2 times higher prime member sign-ups in its month-long Great Indian Festival (GIF) 2022 over last year.
In other segments, too, growth was upbeat. Harkirat Singh, MD, Aero Club said strong demand for footwear due to festivals and resurgence in consumer mobility helped the company garner growth over pre-Covid levels. Ashish Khandelwal, Managing Director, BL Agro said the company garnered 25 per cent growth in sales during the festive season backed by an uptick in sales of gift dry fruit, cereals, and pulses.
But whether key segments will cross pre-Covid levels is a key question. Sunil Sinha, Principal Economist, India Ratings and Research said, “A combination of pent-up demand and sense of normalcy with fear of the pandemic subsidising has led to a consumption uptick during the festival season. It remains to be seen whether this consumption boost will sustain beyond the festival season. If one dissects the trends, one can see that consumption is primarily driven by items consumed by upper middle and affluent households and the rural demand has been tepid.”
(Inputs from S. Ronendra Singh, Ayushi Kar, Aroosa Ahmed, Shobha Roy, Suresh P Iyengar, Rutam Vora, Yatti Soni)