Happy Diwali, buy buy

The Diwali blockbuster gets bigger every year. Despite the other sales seasons at different periods of the year, the buying frenzy around Diwali is getting more feverish.

The Diwali blockbuster gets bigger every year. Despite the other sales seasons at different periods of the year, the buying frenzy around Diwali is getting more feverish. It is not restricted to the five days around Dhanteras, the traditionally auspicious day for buying goodies. The season more or less continues till the end of the year. It begins in earnest with the onset of October — the traditional puja sales in eastern India.

The sales have now invaded the internet and the big sites are sitting pretty on massive traffic. This is a trend which could reduce footfalls at shopping centres in the ensuing years. It is expected to cross Rs 250 crore according to a report released by the Internet and Mobile Association of India. Government, the public and private sector help the cause by releasing their annual bonus and other allowances for employees at this time. Consumer goods companies zoom in with a clutch of discounts and freebies to make the party last longer. But within the catch-all spree, the fortunes of different sectors like gold and consumer durables often move in different directions. We examine them by turn

Gold: Gold acquires a special allure in Diwali season. Nearly 40 per cent of the country’s gold sale happens during the Diwali quarter of the calendar year. Last year, gold sale during the festival was 230 tonnes of the total 715 tonnes of gold sold in 2006-07. This trend is expected to continue. In other words, Rs 30,000 crore is expected to trade on gold during this festive Diwali season. Till September alone gold sale in India had touched 700 tonnes. The World Gold Council (WGC) has predicted a 15 per cent increase in sale this Diwali compared to last year.

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“Traditionally, the Diwali season sees one of the largest volumes of gold sales in India. This is mainly due to two reasons: firstly the auspiciousness associated with buying gold on Dhanteras , and second because Diwali comes at the start of the marriage season,” affirms Keyur Shah, associate director, WGC.

Consumer durables: Consumer durables like TVs and washing machines see a major spurt in sales in the Diwali period. According to estimates, sales rise by 30 per cent in this sector on a yearly basis during festival season. Further, 35-40 per cent of the total sales in a year happens during this period. A company like LG has already surpassed its sales target of Rs 1,800 crore for the current season, which is 35 per cent higher than last year.

“The festive mood, rise in disposable incomes, and bonuses have helped buyers to go for high-end durables. This has benefited the industry,” says P. Dhabai, COO, Haier India.

Mobile handsets: This is a relatively new product that is witnessing one of the most brisk sales these days. Mobile retail chains across the country are witnessing an over 100 per cent jump in sales. Mobile phone sales average around 40,000 handsets a month across all the Future Group formats. RPG Cellucom gets more than 50 customers per store everyday — that makes it almost 2,500 customers every month. HotSpot CEO Sanjiv Mahajan said the telecom retail chain sees its sales going up by 35 per cent in the festival season, while Subhiksha Mobile registers an increase of about 100 per cent in the pre-Diwali season, that is a week before the festival.

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Automobiles: Despite the prevailing slowdown in auto sales beginning this fiscal, the festival season has brought much-needed cheer. Heavy discounts have lifted the spirits of the auto industry with car and bike sales staying firm in October. While four-wheeler manufacturers such as Maruti, General Motors and Mahindra & Mahindra continued their strong showing, October brought a respite for bike major Bajaj Auto that managed to beat the steep declines plaguing its sales for months. New model launches and heavy discounts by companies like Maruti, GM and Mahindra, helped companies realise high sales in the month, which also marked the start of the festive season from October 12.

Food and beverages: The festival season marks the second spell for the cola industry, which gathers around 25 per cent of its sales from this season alone. According to cola industry estimates, this season brings a spurt in growth due to family get-togethers and large gatherings that push up consumer spending. Also, this season registers a higher growth of the larger bottles, since bulk purchase is dominant in this season. The first spell for the cola industry is the summer season, of course, which industry analysts say accounts for the highest revenues for the companies, a staggering 55 per cent.

Utensils: This product may seem dull compared to the other products mentioned above but sales are brisk during Diwali with utensils worth over Rs 600 crore sold during the period. Majority of the utensils during the season, are sold in the categories of cooking and serving as compared to storage and washing. Of the 100,000 tonnes of appliances sold over the year, about 50 per cent are sold during a three-month period starting September, says N.C. Mathur, president Indian Stainless Steel Development Association.

The growth in purchase is predominantly seen in the northern states and Gujarat followed by the western states.