It’s time to splurge

Tags: Knowledge

If you’re in retail or manufacturing it’s time to rake in the moolah as consumers go on a festive shopping binge this season

Most of us don’t need an excuse to spend, but here’s a few feel good reasons— an upward graph of the economy, perception (not reality) of better jobs, and a steady lowering of interest rates, albeit at tortoise speed. A recent ASSOCHAM survey has concluded that consumers are most likely to spend 40% more this festive season then they did last year. The survey took into consideration consumers in the age groups of 24-34 years and 35-45 years in Delhi-NCR, Mumbai, Kolkata, Bangalore, Chennai, Ahmedabad, Chandigarh, Lucknow and Indore.

But it’s not just the urban community that is on a spree; even rural demand amongst farmers and labour is fueling the festive fervour, thanks to a good Monsoon. Who is likely to benefit? Consumer goods manufacturers, electronic industry, jewellers, automobile and fashion brands along with home appliance segments are expected to be the biggest gainers. There is a visible increase in the sales of two-wheelers and jewellery in most rural and semi rural parts of the country. With this there is also a demand for automobiles, mobile handsets and fashion apparel in urban cities. Consumer durables are on a high across regions.

While the North and the South are trailing, big spending has been seen in the Eastern and Western regions. It is most likely that Durga Puja festivities in Eastern cities like Kolkata are leading to extravagant spending while Western cities of Maharashtra and Gujarat have seen binge shopping through Navratris. Delhi and other North Indian cities are expected to pick up pace closer to Diwali.

Women as expected will spend more on fashion, clothes, jewellery and apparel in the next three months, while men will skew towards lifestyle accessories, consumer durables and automobiles.

The survey reveals, grocery spending is likely to go up by about 20 per cent; a 52 per cent increase in apparels, and almost a 32 percent hike in lifestyle accessories in the next three months. However this is not ad-hoc, as consumers will re-look at various brand offers, especially on the lines of value proposition before making a purchase.

The middle and upper-middle class spend around Rs.10,000 to Rs. 25,000 in the festive season on electronic items like mobiles, laptops or LED Televisions. The maximum volumes are expected at online platforms and top e-commerce portals that offer enticing discounts and freebies to boost sales. Amazon, Paytm, Jabong, ShopClues, Snapdeal, Flipkart and Quikr will dole out hefty discounts, cash-back offers and loyalty points. However, realtors and builders are likely to feel the pinch as spending in this segment will trudge along slowly.

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