Amid many economic indicators inching up towards their pre-Covid levels, demand for consumer goods is also in the limelight on the back of the festive season! As India celebrates a brighter Diwali after two years of hiccups, here are some insights into what the demand scenario looks like!
Which Are the Product Categories in Focus?
Sales of products such as smartphones, home appliances, and television saw an 8-12% growth over the last year, whereas apparels and fashion product sales were up by 12-20% compared to the previous year’s Navratri period.
This shift has come after a 6-8 month period of muted sales growth owning to a high-inflationary environment.
What Do the Companies Have to Say?
E-commerce major Flipkart saw its sales rise by 25% compared to last year in its Big Billion Days sale between September 23-30, clocking gross sales of around $5.5 billion.
Social commerce platform Meesho also said it registered a 68% growth in order volumes this year.
For LG Electronics India, the Navratri period saw a revival in demand for entry-level products, with sales falling over the last few months.
According to Puma India, an improvement in ‘Fitness Quotient’ among people leads to the sports attire segment growing about 50-60% year-on-year.
What Does It Mean for Investors?
The Walmart Group claims to have recorded over 1 billion customer visits on its site during the festive days, of which 60% of traffic came from tier-2 and tier-3 cities. This expansion is a strong signal for the domestic demand scenario as demand is also propping up from the country’s rural population.
An intense demand scenario would mean a bumper Q3 FY23 for companies in the consumer discretionary segment and hospitality majors as consumers resort to revenge shopping and revenge travelling!
Amid the interest rate tightening cycle across the world, high inflation figures, and macroeconomic uncertainties, a stable demand outlook in the domestic economy provides some solace to India!
