Dhanda wasn’t really manda this Diwali

06 Nov,2013

 

By Sushma U N & Rajesh Chandramouli

 

The Indian consumer did not disappoint. Early trends indicate they shopped with full vigour this Diwali. Everyone from hawkers on the streets to luxury brands on the high streets had pinned their hopes on the festive season this year, and from what retailers say, they are all heaving a sigh of relief.

 

While mobile phones flew off the shelves, car sales remained brisk. However, refrigerators and washing machines sales were down.

 

Chocolates, smartphones strike gold this season
By Writankar MukherjeeThis Diwali, consumer goods brands across categories are striking gold. Brands like Apple, Samsung, Nestle and Ferrero are hitting new highs in sales, with products coloured various shades of gold, which marketers say Indian consumers associate with being premium.

 

Check this out: Apple’s iPhone 5s in the gold version sold out within minutes of its launch, and received the maximum number of advance bookings. If that’s not enough, the model is now being resold by smaller neighbourhood retailers who have hoarded stock, and on websites like eBay, at Rs 10,000- Rs 15,000 premium.

 

Last week, Apple’s rival Samsung too joined the ‘gold’ rush by launching its costliest smartphone ever in India, the golden-colour Samsung Galaxy Golden which, the company says, has sold beyond its expectations.

 

Among chocolates, Nestle’s Alpino and Ferrero Rocher have sizzled retail shelves during the festive season gifting, both drawing the consumer’s eye with their gilded packaging.

 

“Gold has huge appeal amongst Indian consumers since it’s a fantastic premium stand-out colour,” says Samsung India country head (mobile and digital imaging) Vineet Taneja. “This also means the product needs to be niche or super-premium,” he says.

 

It is probably the same understanding which led Apple to launch just 200-odd units of the gold colour iPhone 5s as part of the launch phase last weekend.

 

Cellphone retail chains like The MobileStore, UniverCell and PlanetM Retail said consumers are ready to pay in advance for the gold device. And of course, some customers who managed to score a gold iPhone5S at Apple’s launch events are re-selling the device on marketplaces like eBay, where a 16GB model is priced at around Rs 63,000 to Rs 67,000, compared with the device’s official retail price of Rs 53,500.

 

UnivelCell Telecom CEO D Satish Babu said several neighbourhood retailers are selling the iPhone 5s model at a significant premium to the market price. The phone was available in the grey market even before its official India launch – dealers at outlets in Delhi’s Gaffar Market and Mumbai’s Heera Panna were quoting as much as 1 lakh for it.

 

No wonder, Samsung is selling its gold-colour offering Galaxy Golden smartphone at Rs 50,000, compared with as compared to its flagship Galaxy Note 3 selling at around Rs 47,000. Samsung’s Mr Taneja says despite the premium pricing, demand for the model has been much more than the company’s expectation during Diwali sales.

 

In chocolates, retail chains like Spencer’s Retail and Future Group say while Ferrero Rocher has been the king of Diwali gifting due to its similarity with the Indian ladoo in shape and golden colour wrapper, Nestle’s first premium chocolate brand Alpino has started off well with a similar packaging giving competition to Cadbury and imported brands.

 

Spencer’s Retail president & CEO Mohit Kampani says while Ferrero’s share increased from 25% to 32% in Diwali FMCG gifting this year, Alpino has notched up a decent 2% share within a couple of months of its launch.

 

Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

Licensed to republish

 

“Diwali sales were as good as last year. The theory that people prefer discount models in a downturn economy got validated. The beginning to the season was sluggish and we were nervous.

 

However, last Friday (November 1) sales were way above expectations,” Raghunath Narayanan, MD of Europa Group, a clothing discount chains, said. “While exact sales numbers are still being collated, we have witnessed single-digit growth in Diwali sales. Per bill value of each customer was slightly lower than last year, but more shoppers compensated for that drop and ensured growth. In this market , not to have de-grown itself is an achievement,” he said.

 

Several automakers who expected muted sales this season were in for a surprise . “Early numbers show that sales grew 10% during Diwali. Our daily shipments , which were 9,800 vehicles a day last Diwali, rose to 15,800 this year,” said Mayank Pareek COO, marketing & sales, Maruti Suzuki.

 

“What we saw this year was a result of pent-up demand. Customers, who postponed purchases, chose Diwali to complete the purchase. However , for the past five or six years, Diwali sales were sluggish. We need to wait and see if this momentum in sales will sustain,” he said.

 

Mobile phone sales appear top draw this year. Sales at India’s largest mobile phone retailer Univercell grew 30% this year. “Sales have been very good this year, with a 30% increase in sales by value compared with last Diwali. This was driven by the Rs 5,000-10 ,000 and the Rs 10,000-Rs 20,000 price bands, which saw highest growth,” Soumya Menon , V-P of marketing and brand strategy, UniverCell Telecommunications.

 

Charath Narasimhan, CEO of Indian Terrain, a mens’ clothing brand echoes this view. “Overall sales have been reasonably good with 30% same-store growth in sales. This has been in line with our expectations. Trousers saw highest growth with khakhi coming back in fashion and sales spiking during the weekend,” Mr Narasimhan said.

 

The consumer durables sector saw mixed response with sales of TVs growing, while sale of refrigerators and washing machines fell this year, said B A Srinivasa, CEO and joint MD, Viveks, a multibrand consumer durables retailer. Over the last few weeks, there was doubt over sales of durables as RBI had banned sales of products at 0% interest on credit cards but this has not impacted sales, Mr Srinivasa said.

 

The monsoon/end-of-season sale in July was good, Diwali turned out better, and going forward too, for the new year sale, retailers expect the buoyant mood to carry on through what is left of the year. “The wedding season in the north is just a week away. Weathermen have said the winter is going to be strong, and this bodes well because retail will stay longer due to the winter,” said Mr Narasimhan of Indian Terrain.

 

MAKING MERRY

Europa Group, a clothing chain, has seen single-digit growth in sales. Per bill value was lower but more shoppers were seen.

 

Maruti Suzuki’s daily shipments for Diwali this year were 15,800 cars compared to 9,800 vehicles last year. Sales grew 10% Mobile phone retailer Univercell saw 30% sales growth this year with 5k- 10k, 10k- 20K segments growing most Multibrand consumer durables retailer Viveks witnessed good sales in TVs while refrigerators and washing machines fell.

 

Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

Licensed to republish

 

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