(MENAFN- KNN India)
Festive Season Anticipates Record Consumer Spending of Rs 4 Trillion, Marking a 25% Year-on-Year Increase
New Delhi, Sept 18 (KNN) Nearly Rs 4 trillion of consumer spending is expected this festive season across online and offline channels, which is 25 per cent higher than last year, according to estimates by companies, consultancies such as Deloitte and Redseer and industry bodies such as the Confederation of All India Traders (CAIT) and the Clothing Manufacturers Association of India (CMAI).
The 2023 festive season spending will be higher than the 2019 level by 60 per cent, when spending was around Rs 2.5 trillion across online and offline channels, as per a report in the Financial Express.
The sectors poised to benefit significantly from this surge will encompass durables, electronic goods, clothing, fashion and lifestyle products, jewellery, toys, gifts, kitchen appliances, beauty and personal care items, as well as confectionery and sweets.
On Friday, consultancy Redseer gave the first indication of festive season spending this year, saying that e-commerce platforms would clock a gross merchandise value (GMV) of around Rs 90,000 crore in terms of sales, higher than the Rs 76,000 crore seen last year during the festive period.
Mrigank Gutgutia, partner at Redseer Strategy Consultants, said that there was a clear trend of enhanced GMV contribution this year versus previous festive sale periods, driven by higher consumer confidence, interest rates peeking out and the Indian economy growing strong.
India's GDP growth rate rose to a pace of 7.8 per cent year-on-year in the April-June quarter of 2023, compared with growth of 6.1 per cent year-on-year in the January-March quarter of 2023, according to data released by India's National Statistical Office. The growth rate was despite a high base year effect, the NSO said.
This strong economic growth will reflect in terms of offline consumer spending, with Rs 3-3.1 trillion of offline sales likely this festive season across discretionary categories, Praveen Khandelwal, general secretary at CAIT, an apex body of traders, said.
“What has happened this year is that consumers are not seeing the threat of a pandemic any time soon. That is one aspect for this likely burst in spending. The festive season is also an occasion to buy and consumers this year are willing to loosen their purse strings after months of holding back due to inflationary concerns,” he said.
Rahul Mehta, chief mentor, Clothing Manufacturers Association of India (CMAI), said,“The likely growth should be at least 10 per cent this festive season versus last year for apparel makers. This is fairly significant because the last few months were quite challenging for the apparel industry due to a discretionary slowdown. But it is reversing now.”
Signs of this became apparent during the Independence Day sales and Onam sales this year, both falling in the month of August.
The Apparel, fashion and lifestyle chains are set to benefit not only from the festive season, but also from the upcoming wedding season which will kick off after Diwali, from November 23 to December 14.