Easy funds fuel consumer boom in Punjab

Chandigarh | Updated: Jan 2 2006, 05:48am hrs
Splitting up joint families, easy availability of loans and advertisers reach out to rural markets have together fuelled a demand for consumer goods in Punjab, says a cross section of people across the state.

Pawn Kaushal, professor at Punjabs oldest government college at Ludhiana, says that on average, one joint family split into four familiesfuelling individual need for household goods. Growth in the number of working couples has also meant more demand for convenience consumer goods.

The easy availability of loans by banks and zero-per cent interest financing by manufacturers have been identified as the demand drivers. Moreover, with growing reach of television channels, internet, mobile phones and roadshows by major consumer goods manufacturers in rural areas, consumers, who have deep pockets here, are fast integrating into the mainstream.

The boom in real estate prices in and around Chandigarh has also created a neo rich semi-urban consuming class.

Chartered accountant Rohit Nanda says the new generation believes in spending more and saving less. Chandigarh has emerged as not only the most banked city in the country, but has also emerged as the leader in per capita income.

The hosiery industry at Ludhiana is in high spirits, with the sale of woolens touching an all-time high. Sales of woolens grew at least 25% over the last few months, a reversal in the trend seen over the past few disappointing seasons.

Companies have started encashing this by launching new collections says Ramesh, a shopkeeper in Chaura Bazaar here.

Hosiery markets in the city like Dal Bazaar, Chawal Bazaar and Hazori Market are abuzz with activity.

As per estimates, domestic annual purchase of woolens in the city on an average is around Rs 1,500 crore, catered to by nearly 4,000 units. The industry is optimistic that sales would touch Rs 2,000 crore this year. It is the low-end market, contributing 70%, where the demand is growing fastest. The high-end segment comprises 10% of the market and is fashion driven.

Ludhiana, once called Indias Manchester, whose hosiery industry was in dire straits following the influx of Chinese goods, is now on its path to recovery thanks to new consumer demand.