With the economic recovery taking shape, Indian households are expected to spend more. (Represent)
Shoppers in India are back online and in stores, ramping up this festive season following the celebrations and slumping consumption of the coronavirus pandemic in previous years.
Online marketplace Amazon.com Inc. and Flipkart owned by Walmart Inc. saw sales jump 27% from a year ago to $5.7 billion in the first sale of the holiday season from September 22 to 30, the consulting firm RedSeer estimates. Traders are estimated to spend about 2.5 trillion rupees ($30.2 billion) in stores.
This year’s Diwali, the festival of lights that falls on October 24 and is the equivalent of Christmas in the West, will be India’s first celebration season since the pandemic began without related restrictions. to the virus. The return of shoppers will be the driving force behind consumption, the backbone of the economy.
Here are four charts that help explain consumer trends more broadly:
New car sales rose 57% from a year ago during the nine-day ‘Navratri’ period before Diwali, data from the Federation of Associations of Automobile Dealers shows. Two-wheeler sales in India, an indication of rural demand, were up 3.7% from 2019. Sales of cars and sport utility vehicles were up 92% on the month. 9 from a year earlier, according to the Association of Indian Automobile Manufacturers.
India’s largest car manufacturer Maruti Suzuki India Ltd. saw demand for its cars increase by 20% year-on-year, led by its premium product. Maruti CEO Shashank Srivastava said: “Growth numbers have been flat in both urban and rural centres,” said Shashank Srivastava, Maruti’s CEO, which said interest rates are higher than zero. reduce demand.
When the demand for goods increases, businesses increase capacity. According to the Reserve Bank of India, total financial resources from banks and non-banks to the commercial sector increased by almost five times to 9.3 trillion rupees in the April-September period from 1 0.7 trillion rupees a year ago, according to the Reserve Bank of India. “Non-oil non-gold imports still recovered, suggesting a sustained recovery in domestic demand.”
Good monsoon rains and the easing of pandemic restrictions have boosted economic activity in agriculture, the service sector and small and medium enterprises. That was accompanied by a drop in the unemployment rate to its lowest level in more than four years in September.
The rural recovery is also helping consumer companies normalize their pricing strategies. Haldiram’s, one of India’s leading fast food manufacturers, has seen the assortment ratio between small and family packs back to 70:30, “which reflects that of rural areas. are also buying,” said AK Tyagi, the company’s chief executive officer. “Gift packages are in great demand.”
According to RBI survey, with economic recovery and normalization of income levels, Indian households are expected to spend more. Much of this spending is on buying essentials, which in recent months have become costly due to supply-side shocks. But overall consumer confidence is still up, indicating a greater willingness to spend discretionary spending.
“For the first time in three years, this festive season sees strong demand,” said Gaurav Kapur, chief economist at IndusInd Bank. “Since the beginning of the year, people are spending on goods and services, shopping mall arrivals are increasing, airline seat occupancy rates have skyrocketed despite high ticket prices.”
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
