It seems to be a rather dull beginning to the festive season this year, as consumers continue to remain cautious about spending. With sales not picking up during Onam and Ganesh Chaturthi, retailers and brands are now pinning their hope onto Dussehra and Diwali in October, this year. “Consumer sentiment haven’t been very positive so far. So far demand has remained muted. If it continues to remain the same, we may then slash advertising budget,” Kamal Nandi, business head and executive VP, Godrej Appliances, said.
The company usually spends around five percent of its sales on advertising and marketing.
According to industry experts, several factors have led to Indian consumers’ tightening their purse strings. To begin with Southern India continues to grapple with flood; add to that the problem of job cuts.
“We will have to wait for a couple more weeks to get a clear picture. As of now there is not too much excitement in the market and although the festive season has arrived demand is yet to pick up. Everyone is in a wait and watch mode before finally deciding on discounts and ads and promotions budget during Diwali,” Anil Talreja, partner, Deloitte India, noted.
Read Also: Ban Amazon, Flipkart’s festive season sale: Traders body asks govt
For electronic goods retail outlet Croma, run by the Tata group owned Infiniti Retail, demand has been subdued, this year. As per Ritesh Ghoshal, chief marketing officer, Infiniti Retail, smartphones, home and entertainment sales remained sluggish. “While there is a fair amount of demand for lower price point affordable products, it has been a struggle to sell higher ticket size product,” he explained.
In an effort to drive sales, retailers are now planning a host of deals and discounts coupled with plans around equated monthly instalment (EMI) schemes. Further, retailers have also kept the inventory low.
For Nilesh Gupta, managing partner, Vijay Sales, this has helped in driving sales a bit, as on an average 70%-80% of the product price is paid through EMI. “Moreover, over the last few months television prices have dropped as bigger brands were forced to review prices due to consumer preference for value brands. This too has led to an improvement in demand,” he said, adding that despite the slowdown this festive season is expected to post anywhere between 8%-10% increase in sales, when compared with the same period last year.
Read Also: Amid fear of poor festive season sale retailers reduce inventory of goods
Samsung India too believes that the festive season has just begun and not all is over yet. “This year Samsung has further consolidated its leadership in televisions, smart ovens and refrigerators and expects to clock double digit sales growth this festive season across its consumer electronics products. Additionally, catering to consumer needs we have expanded our distribution and service network by 300%,” Raju Pullan, senior VP, consumer electronics business, Samsung India, said.
Samsung India has launched an array of products, coupled with EMI as low as Rs 1,078 per month for smart TV, up to 25% instant discount and 15% additional cashback which can be availed till October 30, 2019.
News is by Jharna Mazumdar from ETBrandEquity