Indian consumers are always on the lookout for an auspicious sign to start something new in their life and what better is auspicious than a festive season. One such new thing is buying products from ordinary consumer goods to cars and property. This is the reason why many retailers declare attractive offers, thus attracting more consumers, which results in more trade.
Celebration of any festival season is marked not just by observing rituals. It is also a time when new products are bought and money is spent on luxuries. This is the reason why many retailers are ready to serve their customers with attractive offers and deals, and for many years Navratri is a favorable season for both customers and retailers.
All of it slumped last year due to the Covid-19 pandemic, except for the online retail sector, which found it even increasing. The Covid restrictions discouraged people from going outside thus creating an economic slump among the offline market sector. But 2021 seems to be rejuvenating the offline market again, as sales increased 15% instead of the expected 3%.
The reduced infected numbers and better vaccination rates have made the state and the central governments reduce the restrictions, which incentivized more people to move outside their homes. This pattern peaked during the Navratri, which in normal cases sees a 30—40% increase in sales.
This festive season saw the rise in demand for premium electronic goods like high-end smartphones, double door fridges, and large LED and LCD televisions, and in other premium sectors too. But all is not rosy in this season, as all of the retailers face inconsistent supply situations. This inconsistent and unpredictable supply situation has adversely affected every sector.
A Strained Supply Chain
It has more adversely affected the automobile sector, as customers prefer to get their vehicles on auspicious days, which becomes a challenge for the dealers in the condition of inconsistent supply. This is more or less the condition in other sectors. The cause of the supply strain goes back to restrictions placed on logistical movements and reduced operating time of stores and warehouses. These restrictions are only being lifted gradually and this delay has caused dearly for the supply infrastructure.
Another issue they face is the global shortage of vehicular components, high shipping rates under the issue of container shortages and commodity inflation, have all led to price hike in consumer electronics and the automobile, and has adversely affected the two-wheeler sector. But in the rest of the market, instead of down-trading consumers, prefer such costly goods, which is very much evident in the premium electronic products and passenger car sector.
Signs of Hope
But even in this crunch, one can safely say there is a positive sign for a market recovery, especially the offline one, and many companies like LG, Croma, Mahindra and Realme, are reporting high bookings, especially during the festive season, with retail sales being clocked at 15-30% profit. The companies are now increasing production and improving the supply chain to meet the increasing demand.