Tight strings on wallet this Diwali (text & videos)

24 Oct,2011

By Tuhina Anand

With inputs from Shruti Pushkarna in New Delhi (text and videos) and Insiyah Rangwala in Mumbai

Looks like the sparks this Diwali could be less bright as for people who traditionally would see big business during the festive season be it shops selling consumer durables, gadgets and gizmos and of course jewellery are not too optimistic on the sales. The mood seems a bit muted this year what with inflation and a general  economic uncertainty. Its not that purchases are not being made but the general consensus on the mood is that people are cautious before spending.

For shops selling consumer durables, Diwali has been a money spinner but things seem to have changed in the last 2-3 years. Mohan Singh, Branch Manager, Next Retail Ltd in Delhi in a conversation does share that sales are down as compared to last year. But he is hoping on Dhanteras purchase to make up for this slow start. He said, “Last year there was a huge demand for microwaves, washing machines and TVs but this year except for LCDs, there isn’t much demand for other products in this category. In fact I would term it as black Diwali.

HR Giria of Girias, which is a multi-city chain of consumer durables showrooms dubs that even if the sale would be encouraging this year it would only be `marginally better’. In the meanwhile Girias is leaving no stone unturned to woo customers with both offers in shop as well as extensive advertising in print to reach to large number of customers.

While the mood may be sombre but one thing is clear that when its comes to making purchases this Diwali, its LCDs and LED’s that is `hot’ item. Samsung, Sony and LG are the preffered brands and the 32inch seems to the most popular buy. In fact in some shops like Vijay Sales, the floor manager informs us that these panels comprise almost 50 percent of their sales.

Small appliances like hand blenders, toasters and rice cookers are popular picks for gifting purposes. Also the shift is now on gadgets especially tablets, MP3 and smart phones and digital cameras when it comes to gifting. One does not need to be disappointed as there are also shops who have seen increase on sales this year especially in terms of gadgets like Manpreet Singh, Manager, Hari Om Electronics informs that as compared to last year gadget purchases have gone up, and says it has increased by 30 per cent.

Most of the shops have easy availability of credits to help shoppers purchase more. Some of these have also tied up with banks like ICICI, HDFC, Amex, Citibank to encourages customers to spend more.  The average spends could be anywhere between Rs 25000-35000. Also most retailers have scratch card or other such offers mostly given by the company itself to give something more to the consumers.

And if one is discussing Diwali purchase one has to look at gold and silver purchases this Diwali as jewellery or coins is a major part of Diwali shopping. With spiralling gold and silver rates, these purchases have become far more dearer. In fact, a jeweller in Mumbai rues the fact that this year the sales have gone up only by 150 percent whereas in the past it used to increase to 450 percent. In fact, 10 per cent of his income would come from Diwali.

Mohit Gupta, Vice President, PP Jewellers Pvt Ltd, said, “Sales have definitely gone down this year because of the soaring gold rates. Gold and silver coins are the most popular purchases, they are seen as investment. For gifting, because of high gold rates, this year people are going in for more light weight jewelery like ear rings and small pendants. Every year we see a growth of at least 20 to 30 percent but this year there isn’t any such indication so far. We are expecting a lot of purchases on Dhanteras.”

Even though in the last few days the price of gold and silver have gone down but the increase in prices throughout this year will be a major deterrent for buyers. In fact, World Gold Council is advertising heavily on the fact that how gold is a good investment option. So the general mood is that the market is stagnant this year or the sales will be less than last year. Even in purchases people are going for small items. As a local jeweller in Bangalore informs that last year during diwali they had sold around 350-400 silver coins and will be stocking the same this year. Currently, a 5gm silver coin will cost around Rs 260 and 1 gm of Gold is approximately Rs 2600 (prices will fluctuate according to daily rates).

Harish Goel, Owner, Goel Jewellers sums up the mood, “Sales are very low this festive season thanks to the gold prices. There are hardly any purchases from the middle classes so to say, even from higher classes, purchases are owing more to weddings rather than Diwali. Gold and silver coins like every year are preferred items. Last year the average spend per customer was somewhere around 50000 but this year it isn’t even half that amount.”

These retailers are pinning their hopes on Dhanteras and let’s hope that they finally have their cash registers ringing on the auspices day.

Also on Dhanteras, people buy steel items. Talking to Sumit Jain, Owner, Gift Gallery, he said, “Crockery is always an all time favourite. Like every year, this time too crockery items are popular gifting choices. Both china and glassware are popular gifting choices but we are seeing a big dip in sales. The market is not buzzing with consumers as it does every Diwali. Dhanteras is one day we are looking forward to but those are mostly steel purchases.”



On market trends in the last few years 

Baldev Ahuja, Manager, Aarvee Sales (electronics showroom)- Market is down…four years back the market used to be buzzing but now because everything is getting expensive people are spending less on these items.

[youtube width=”400″ height=”250″]http://www.youtube.com/watch?v=_IVkk-gpGkM[/youtube]
On the most popular product this Diwali (LED) Saquib, Sales Executive, Audio Voice India Pvt Ltd- LEDs are more popular than LCDs because the prices have gone down. Also LEDs are better in quality as compared to LCDs.

Baldev Ahuja, Manager, Aarvee Sales- People are more attracted towards LEDs this year because of the dip in prices.

[youtube width=”400″ height=”250″]http://www.youtube.com/watch?v=B-TZcccS90M[/youtube]
On the preferred gift items Saquib, Sales Executive, Audio Voice India Pvt Ltd – People this year are opting for more gadgets rather than home appliances, they go in for phones, ipods etc more as compared to LCDs [youtube width=”400″ height=”250″]http://www.youtube.com/watch?v=RKXr2hGOggc[/youtube]

On most popular purchases this Diwali 

Neeraj, Owner, Rama Krishna Jewellers- Gold coins are very popular this year, we have coins in all denominations; people are buying and investing more in coins this year.

[youtube width=”400″ height=”250″]http://www.youtube.com/watch?v=d2k-84Twu78[/youtube]
On how gold rates have affected sales this Diwali Lajpat Anand, Owner, Luxmi Jewellers- Lot of difference in the market this year…only people who have to buy for weddings etc are buying and even they have cut down on their budgets; as for other purchases, people’s budgets have been messed up because of increasing gold prices.

Rahul, Manager, Rajesh Gems & Jewels- Big difference between this Diwali and last year is the gold rate that has gone up but it hasn’t really deterred people from buying gold during this Diwali…our sales have gone up as compared to last year.

[youtube width=”400″ height=”250″]http://www.youtube.com/watch?v=rvPwnxqv6Pk[/youtube]


CUSTOMER VOXPOP   Mrs Shukla, Housewife- As per the trend, prices go up every year, so obviously this year also it has gone up…but what can we do, we have to buy stuff for our own use and for gifting purposes.

Nidhi, Working Professional- As compared to last year…we spend the same, Diwali is one special festival, so no cutting in costs, Its Diwali!

[youtube width=”400″ height=”250″]http://www.youtube.com/watch?v=UmBk-uhlOl8[/youtube]

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