Defying the threat of a possible COVID-19 third wave, consumers in key urban centres flocked marketplaces ahead of Diwali - bringing much-awaited respite to retailers and traders. As footfall in major trading and retailing hubs peaked, sales of electrical items, appliances, personal care and gifting products bounced back to overtake pre-COVID numbers.
Take Chandni Chowk, for instance. The capital's largest trading hub that houses two of the major markets - Bhagirath Place and Sadar Bazaar - recorded a significant jump in business during the past two weeks. According to Bharat Ahuja, President, Delhi Electrical Traders Association, footfall in the two of the largest marketplaces in the country was highest in three years.
"We were observing subdued sales for the past three years with last year being particularly bad. But this time, sales of Diwali items like lightings jumped significantly even in comparison to pre-COVID days as consumers poured in from all parts of the city and neighbouring states", he said.
At the other end of the city, at South Delhi's posh Select City Walk mall, retailers are equally excited as festive sales touched pre-COVID numbers. According to them, sales of beauty products touched 2019 festive season figures, while for gifting items it registered a 7 per cent growth over pre-COVID levels. Fashion and apparel, a category that suffered heavily since the COVID-19 pandemic began in early-2020, recovered to 95 per cent levels.
"Led by sales of beauty and personal care items, categories like athleisure and electronics performed very well this time", said Yogeshwar Sharma, Executive Director and CEO of Select City Walk Mall. Footfall at the high street destination touched 78 per cent of pre-COVID levels but with "only serious buyers" visiting its premises, recovery in sales remained stable this time.
In key festive categories like durables and electronics, steady demand from urban consumers helped manufacturers. In the home appliances market, the premium segment grew by over 30 per cent, followed by the mass-premium price segment, said Kamal Nandi, Business Head and Executive Vice-President at Godrej & Boyce.
"Demand in urban markets have been much higher than pre-COVID levels. With consumers aspiring to upgrade their home appliances, sales of premium categories was higher", said Nandi.
While in large electronics categories like smart televisions (TV), demand surpassed supply. "We couldn't meet the demand for 43-50-inch smart TVs as shortage of components and delay in the arrival of shipments hampered supply chain locally. Overall, the business grew by healthy double digits in this season", said Avneet Singh Marwah, CEO of TV maker Superplastronics.
As per the early estimates from the Confederation of All India Traders, sales through offline traders and retailers touched a decadal high of Rs 1.25 lakh crore with Delhi alone raking in Rs 25,000 crore of sales ahead of Diwali.
All's Not Well, Though:
Despite glitters all-around urban marketplaces, sentiments in rural markets remained gloomy. Unlike in urban centres, sales of consumer durable items failed to take off. While bookings at auto dealerships were "one of the worst in years".
According to Federation of Automobile Dealers Associations (FADA), sales of entry-level two-wheelers (125CC or lower) was poor. Further, the rising cost of ownership has kept many entry-level four-wheeler buyers out of the market this time.
"This is the worst festive season, which Indian auto retailers have seen in a decade", said Vinkesh Gulati, President, FADA. Sales of mid and high range vehicles like compact SUVs, SUVs and luxury cars were impacted due to chip shortage. But entry-level two and four-wheeler sales were impacted due to poor demand as bookings fell well short of available units in the festive season.
According to Gulati, entry-level vehicle sales suffered as consumers are conserving cash in anticipation of a possible third wave that may result in higher healthcare expenditure.
Nandi from Godrej concurs. Just like automobiles, sales of home appliances like refrigerators, washing machines and microwaves, suffered in rural markets.
"While last year, all markets performed well as pent-up demand drove sales, this time households in smaller towns and rural markets are trading cautiously. It seems they are conserving whatever savings they have to avoid a reputation of what happened during the second wave", he said.
In urban markets, certain categories are yet to take off. In metro markets, family entertainment, especially the theatre business is lagging much behind pre-COVID levels.
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