Despite e-frenzy, crowds throng malls, markets

20 Oct,2014

 

By A Correspondent

 

Malls and markets in and around Delhi, Mumbai and Kolkata were teeming with shoppers scouring for Diwali gifts and grabbing the latest electronic items last weekend, bringing relief to traditional retailers facing an unprecedented heavy discounting onslaught from online retailers.

 

Supermarkets and consumer durable companies said it is a much better Diwali shopping season — when traditionally the biggest chunk of their annual sales takes place — than last year, thanks to improved consumer sentiments, although some smaller retailers have been impacted by big online sales.

 

“There is a good number of serious shoppers out there,” said William Bissell, managing director at Fabindia. The retail chain of ethnic garments and furnishings has seen a 31 per cent year-on-year jump in its sales so far this Diwali season.

 

Vineet Jain, vice president for Big Bazaar in the Delhi region at Future Group, said, “Probably, Sunday is going to be the best single-day sale for us in NCR (national capital region).” Even electronics retailers reported sales jump despite huge discounting offered by e-commerce companies such as Flipkart, Amazon and Snapdeal, thanks to the decision of top brands such as Sony, Samsung and LG to control supply of their top models to online stores.

 

“This weekend there has been huge rush in malls and parking spaces too are full after a long time, which is a good sign,” said Ajit Joshi, CEO and MD at Tata Group’s Infiniti Retail that owns Croma electronics retail chain.

 

“Sales have been extremely good, especially for large appliances like frost-free refrigerators and entertainment products like televisions and home theatres,” he said. This festive season all top companies such as Apple, Sony, Samsung, LG and Lenovo have launched their flagship models, and mostly they were kept away from online stores.

 

“Some consumers were waiting in the wings for good offers during the ecommerce discount period but since they failed to get their desired product, they are back in the malls,” a senior executive at a top electronics chain said on condition of anonymity. Consumer electronics firms have been banking heavily on this Diwali after poor performance last year when consumers shied away from making costly purchases due to the economic scenario and inflation, and marketers did not launch any big model then. Amar Babu, managing director at Lenovo India, said consumer sentiments have improved and the company expects a good season.

 

“After last year’s Diwali, the market had become really tough but we are witnessing good demand since last 7-8 days,” he said. Sony India said demand for its flat-screen televisions have soared by 40-50 per cent over the period before Diwali last year, helped by a sudden pickup in the last one week.

 

Sunil Nayyar, head of sales for Sony India, said the company targets 60-70 per cent sales growth this Diwali, led by heavy demand for flat-screen large televisions of 42-56 inches, which segment is expected to contribute 55 per cent of total sales. Garment retailers such as Pantaloons Fashion and Arvind Lifestyle Brands, too, said Diwali sales had a delayed start.

 

Offline retailers feel it’s is no longer a month-long festive buying phenomenon as Diwali sales period has been shrinking each year. Less number of shopping days doesn’t necessarily mean lower sales.

 

“While we saw delayed start to Diwali shopping this year, like-to-like sales growth has increased 10 per cent which we had aimed for,” said Shital Mehta, chief executive officer at Pantaloons Fashion. “The growth was much higher at over 30 per cent on Saturday, which indicates that the next few crucial days leading to Diwali will also be good.”

 

In fact, while people rushed to the malls in the weekend, they have had a near-deserted look during weekdays. J Suresh, managing director at Arvind Lifestyle Brands, said, “This Diwali, there has been a contrast of sorts with low sales during weekdays and better than expected demand on weekends.” Meanwhile, some apparel and electronic retailers that had built up inventory for Diwali have been caught off-guard by the heavy discounting by e-commerce companies.

 

Source:The Economic Times

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