India’s Festival Spending Grows Despite Concerns Over Inflation And Global Slowdown
October 15, 2022: Online and offline sales during the Hindu festival period that begins in the last week of September and lasts until the beginning of November are estimated to exceed $27 billion.
Indian consumers are enjoying everything from cars, houses and TVs to travel and jewelry in the festive season that started last month, according to early data, giving a boost to growth prospects despite economic pessimism in other parts of the world. .
Online and offline sales during the Hindu festival period that begins in the last week of September and lasts until the beginning of November are estimated to exceed $27 billion, almost double the amount in the same period before COVID in 2019, and nearly 25% more than last year, according to industry estimates.
The sales would include nearly $15.2 billion in offline sales, compared to around $8.5 billion in 2019, according to the All India Confederation of Merchants (CAIT).
This year will also see sales worth $11.8 billion on online platforms like Amazon and Walmart’s Flipkart, according to Redseer, a market consultancy.
Retail sales always peak between October and November, when the nation of 1.4 billion people celebrates the major festivals of Dussehra and Diwali. It is also an auspicious time of year to get married, according to Hindu belief.
But this year’s increase is much higher, mainly due to pent-up demand as COVID-19 recedes after two years of ravaging the country, as well as a rise in wages and an increase in jobs to as the economy recovers, industry leaders said.
“After two years of pandemic fatigue, Indian consumers are upbeat ahead of festivals,” said Sanjay Kothari, associate partner at Redseer, adding that online sales were up nearly a fifth in the first week of the season. compared to last year.
With a four-fold increase in online shoppers since 2018 to nearly 200 million, and demand for items like mobile phones and fashion apparel spreading to small towns, such sales are likely to remain strong for at least the next three years. months, he said.
“We hadn’t been out of town since the COVID outbreak, but we decided to have a little fun this year during the festivals,” said Manoj Kumar Das, a 53-year-old tea vendor in Bhubaneswar, the capital of the eastern state of Odisha.
Das, who earns about 30,000 rupees ($364) a month, said he spent more than 50,000 rupees on a seven-day vacation, as well as buying new clothes for his family this year.
Car sales, including two-wheelers, rose 57% during the nine most auspicious days of the Hindu calendar this month compared to last year, and were almost a fifth higher compared to the pre-pandemic period in 2019, according to the Federation. of Associations of Automobile Dealers.
In the country’s seven major cities, home sales in the September quarter were up nearly 70% from a year earlier, according to a report by consulting firm JLL, as builders offered festival discounts.
The boom in India comes despite economic challenges in other parts of the world, with rising inflation following the Russia-Ukraine war and sharply higher interest rates.
Countries that account for a third of global output are expected to be in recession next year, the IMF said.
In India, lending rates have also risen around 150 basis points from May as the central bank moved to combat consumer inflation, which hit a five-month high of 7.41% year-on-year in September.
But economists said the feeling in India was that inflation had peaked as economic activity recovered. Rising 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
Retailers in Delhi’s Chandni Chowk jewelery and cloth markets and in the states of Uttar Pradesh, Gujarat, Odisha and Kerala reported a big pick-up in demand, especially in urban areas.
However, rural demand remained weak due to lower wage growth compared to cities, traders said, and possibly due to unseasonal rains in October that affected crops.
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