Consumer sentiment is at an all-time high. After a pandemic-induced lull of two years, the return of healthy sales and demand graphs is bringing cheer to restaurants, malls, premium retail brands, e-commerce platforms, carmakers, and hospitality players alike, as consumers continue to shop, eat out, travel, and splurge this festive season.
As per the latest findings of the India Consumer Sentiment Index (CSI) released by Axis My India, a consumer data intelligence company, 81% of those surveyed said that shopping for family will contribute as a ‘major’ expense this festive season. According to the survey, 21% of consumers plan to spend more this festive season as compared to last year.
Another report released by social media platform ShareChat reveals that every second Bharat (people who prefer Indic languages as their main language for using social media) user is willing to spend more during the festive period this year than they did last year, demonstrating the consumers’ willingness to spend significantly. As per the survey, discounts and offers are major factors that influence 49% of Bharat’s purchase decisions.
Evidently, the Confederation of All India Traders (CAIT), an apex body of the traders’ community in the country, is betting big on festive sales. It is expecting sales worth Rs 1.5 trillion this year, compared to Rs 90,000 crore in 2019. CAIT estimates over 25 lakh weddings to be solemnised in one month, starting November 14 this year with maximum auspicious dates in November and December. The traders’ body is expecting business of Rs 3 trillion to flow in this wedding season.
Witnessing over 130% pre-Covid growth in terms of demand and occupancy, DLF Malls has strengthened its portfolio by adding 130 unique brands across its retail and F&B categories in its eight premium and luxury properties in Delhi-NCR. “We expect to grow 15-20% m-o-m in October-December. Our luxury retail segment is growing between 150% and 170%,” says Pushpa Bector, executive director, DLF Retail, and head, luxury and shopping malls.
Another premium mall, Select Citywalk in New Delhi, is seeing 7-8% growth in demand and an increased footfall this year. “Luxury shopping is back, so are the premium brand categories. Footfalls have increased, people are eager to shop, get entertained at physical shopping centres,” says Yogeshwar Sharma, CEO and executive director, Select Citywalk, Delhi.
Mia, a modern and chic jewellery brand by Tanishq-Titan Company, is also seeing good business. “With seasonal offers of ‘up to 20% off’ we are very optimistic of the growth,” says Shyamala Ramanan, business head, Mia by Tanishq-Titan Company.
Croma, the omnichannel electronics retailer from Tata Group, expects strong double-digit growth this festive season. Avijit Mitra, MD & CEO, Croma-Infiniti Retail, says, “As more customers are upgrading to better gadgets, we have especially rolled out ‘Festival of Dreams’ campaign with a bumper sale till October 30 with up to Rs 13,000 exchange and upgrade benefits with up to 24 months’ EMI offers.”
Consumer durable and electronics firm Godrej Appliances launched a slew of premium products to drive over 50% growth. Kamal Nandi, business head and EVP– Godrej Appliances, says, “Between last festive season and October, the 100 new product SKUs offer choice, coupled with schemes for consumers to upgrade easily, and these offerings will help us drive more than 50% growth this festive season.”
Fumiyasu Fujimori, managing director, Panasonic Marketing India, says, “In terms of value growth, our products from inverter ACs to LEDs grew between 10% and 38%.”
Premium retail and luxury brands like Lacoste India are upgrading boutiques and adding new segments for consumers opting for brand value and quality. “Demand is growing as more customers are upgrading their lifestyle, stepping out to shop. This helps sales to pick up. We are already witnessing 40-50% sales growth from both online and offline channels,” says Rajesh Jain, MD & CEO, Lacoste India.
Luxury watchmaker Franck Muller has collaborated with Kapoor Watch Company for a limited-edition collection with 150 pieces—50 pieces in gold at Rs 18,72,000 and 100 pieces in steel and gold at Rs 11,70,000—for the festive season. Pratiek Kapoor, head of marketing and operations, Kapoor Watch Company, sees corporate queries picking. “Covid-19 has been a big game-changer for luxury business. New clients, who were shopping outside India, now get the same experience here and shop more, which was not the case from 2016-2019. We are growing organically at 20-25% this year,” adds Kapoor.
Driving growth
According to a report by Federation of Automobile Dealers Associations (FADA), the apex organisation of the auto sector, the overall retail sales of automobiles grew by a whopping 57% during the Navratri period (September 26-October 5), signalling a return of demand in the sector.
Similarly, as per data from Society of Indian Automobile Manufacturers (SIAM), domestic passenger vehicle sales recorded 92% year-on-year growth to 3,07,389 units in September . The total passenger vehicle sales comprising cars, utility vehicles and vans in the domestic market stood at 1,60,212 units in September last year.
Festive feasting
Festive feasting and eating out are securing a strong comeback. “Restaurants are packed with an increase in footfall of around 75% as compared to the first quarter of the year,” says Vikrant Batra, co-founder, Cafe Delhi Heights, which stands tall with 24 outlets across Delhi-NCR, Mumbai, Pune, and Chandigarh.
Calling festive feasting as revenge partying, Priyank Sukhija, MD & CEO of First Fiddle Restaurants, launched new outlets Bougie, Miso Sexy, and Butter Room early this year, Noche in September and Tickled Pink in October. “We have received positive feedback for our new outlets. Celebrations have started on a grand scale, with a 2x-3x optimism in growth and demand,” adds Sukhija.
McDonald’s India is bullish with a rise in outdoor activities. Arvind RP, Director, Marketing and Communication, McDonald’s India (West and South), sees a great demand for ‘drive-thrus’ as the travel season is back. “Be it Mumbai-Pune or Bengaluru-Chennai, most highway restaurants are packed, so are food courts and dining at outlets, as film screenings are back. The festive quarter will see a broad-based recovery with family meal outings,” adds Arvind, sharing that the revenue growth across channels for McDonald’s India (west & south) for Q1 FY23 vs Q1 FY20 in dine-in channels was 14%, delivery channels 112%, and drive-thrus 57%.
City hotels also see a peak demand. Rahul Puri, multi-property GM, The Westin Gurgaon, New Delhi and The Westin Sohna Resort and Spa, says, “This year is definitely promising. We are very optimistic on robust recovery, especially after a hiatus of two years.”
With the festive season as the busiest time of year, Rohit Chopra, director of F&B, Conrad Bengaluru, says, “This time, consumer sentiment towards celebration is strong. International borders have opened up and the domestic market is seeing gradual growth as compared to the last two years.”
E-comm on a roll
This year brought bumper sales for e-commerce platforms as the gross merchandise value (GMV) hit $5.7 billion during the festive sales week, which spanned from September 22 to 30. This translates to a rise of 27% over the same period last year, as per a report by Redseer Strategy Consultants. Flipkart Group continued to lead the market with a 62% share on GMV basis. It also stood tall in terms of order volumes with a market share of 49%, while Meesho came a surprising second after trumping Amazon. However, the US-based multinational tech firm continued to enjoy 26% market share in India, with other players like Meesho, Nykaa, JioMart, etc, comprising 12%.
Speaking on its annual flagship event The Big Billion Days (TBBD), Flipkart said it “achieved a significant milestone of over 1 billion customers visiting the platform during the eight-day long festival”. It also saw 35 million app downloads in the run-up to TBBD. Over 60% of its customers came from tier-2 and -3 cities.
Meanwhile, Meesho has emerged strong, riding on its USP of selling products at affordable rates. During its Maha Diwali Sale that was live from October 7 to 11, it “witnessed 165% increase in orders as compared to the previous year,” Lakshminarayan Swaminathan, CXO, supply growth, Meesho said.
Amazon is “delighted by the wonderful customer response” to its Great Indian Festival 2022, which started on September 23, with the first 12 days receiving the highest-ever orders, an Amazon spokesperson said.
Riding on the festival-fueled customer demand, Flipkart-owned Myntra, too, wrapped up its “third and the biggest edition ever” of the Big Fashion Festival, which ran from September 23 to October 2. “Over 1.2 million new customers shopped during the event, the highest ever so far,” the company said.
Speaking on the performance of the festival, Sharon Pais, Myntra’s chief business officer, said, “Spreading the cheer of festivities, the Myntra Big Fashion Festival concluded on a high note, with 6 million customers placing orders across fashion, beauty, and lifestyle as they shopped for their entire family’s festive needs.”
E-comm platform Snapdeal termed the consumer sentiment in smaller cities and towns as “upbeat”. “Moving beyond shopping just for needs, users are buying more home improvement goods like bar sets, glass serveware, fragrances and diffusers, wind chimes, etc. There is also an increased appetite for beauty and personal care products like face serums, hair colouring sets, shape-firming lotions, nail art and accessories,” a Snapdeal spokesperson said.
Extended holiday
A holiday falling on a weekend might be a buzzkill for many but this festive season, it is proving to be an added bonus. With Diwali falling on Monday, Christmas on Sunday and New Year on Sunday, travellers have the perfect excuse to extend their holiday and travel. This has led to a huge uptick in travel demand this festive season.
SOTC Travel has observed a jump of over 100% of pre-pandemic levels in certain markets for winter and festive season travel. Daniel D’Souza, president and country head – holidays, SOTC Travel, says: “With the onset of India’s key festive season and schools closing for their mid-term break, Indians across segments are displaying increased appetite to travel.”
Festive season is always a peak time for travel but what’s added to it this year is the post-pandemic demand and long weekends. Rikant Pittie, CEO of EaseMyTrip, says festivals for travel companies usually mean a peak season where the sales are at the highest. “There is a festive rush as everyone travels during this time, especially now, after the pandemic when the demand is at an all-time high,” he explains.
Pittie says they are anticipating a rise in bookings in-flight segment by 60-70% compared to last year, holiday bookings to increase by 50% or more this year and reservations for hotels by 50%. Similarly, Yatra.com reports there has been a 70% increase in booking enquiries, specifically for hotels, as compared to last year.
Not only has travel rebound but spending on it has also significantly grown. According to Accenture’s Consumer Pulse Survey 2022 that was released in September this year, with rising travel costs, half (51%) of consumers also plan to maintain or increase their spend on leisure travel in the next year—perhaps not surprising considering the widely recognised well-being benefits associated with a vacation. Furthermore, two in five (39%) high-income respondents have booked a luxury trip or wellness retreat for some time in the next 12 months.
Rajeev Kale, too, points to the fact that holiday budgets are inflated. The president and country head, holidays, MICE, visa, Thomas Cook (India),says, “Our demand pipeline is currently up by over 3x for the festive-winter season (as compared to last year). What is noteworthy is that despite supply constraints and overall cost escalations (10-20%), our consumers are willing to increase travel spends by 20-30% vs pre-pandemic.”
With increased spending, air traffic, too, is becoming thicker. Aditya Gupta, senior vice-president, hotels and holidays, Yatra.com, shares that there’s significant demand for forward bookings with the popular domestic air travel routes being from tier-1 to tier-2 cities—Delhi-Patna, Mumbai-Jaipur—among others, as the demands pent up.
Sanjay Kumar, chief strategy and revenue officer, IndiGo, says, “We are expecting business to be returning to normal this festive season. We are seeing encouraging trends from customers from all segments, including corporate, VFR and holidays.”
A Vistara spokesperson agrees that there has been a surge in demand across their network, owing to the ongoing festival season, fuelled by VFR and leisure travel. The result is a steep rise in fares. For instance, according to the data provided by Thomas Cook and SOTC, the airfare for Andaman from Mumbai and Delhi in 2021 was Rs 19,000 and Rs 26000, respectively, while this year, it is Rs 51,000 and Rs 38,500, respectively. “Last-minute fares for popular routes will see a steep jump due to high travel demand. One-way fares for routes like New Delhi to Patna which are normally around Rs 5,000 are going as high as Rs 8,000-Rs 13,000 on travel dates just before Diwali,” says Aloke Bajpai, co-founder & group CEO, ixigo.
Shibil Malik, general manager, Sheraton Grand Bangalore, adds that apart from the usual travellers and dine-in customers, they are seeing an increase in demand from corporates. “Companies such as Boeing are coming back to us requesting for outdoor catering services. These are large-scale events for which they want 5-star hotels to create elaborate gourmet menus with live stations and multi-cuisine options for over 6,000 guests, inviting employees and their families to enjoy a day out,” he shares.
As for leisure travel, Ashley James, GM of Angsana Oasis Spa & Resort, which is part of the international chain of luxury resort Banyan Tree Hotel & Resorts, says they are witnessing pent-up demand. “For Dussehra, we had 100% occupancy on most days and mostly from people from the city looking for a little break with some pampering,” he adds.
Meanwhile, according to OYO’s World Tourism Day Study that was released in September this year, metropolitan cities, Delhi, Hyderabad, Bangalore, Kolkata and Chennai will witness the highest demand during the upcoming peak travel months.
Data shared by OYO also suggests that there is a 32% rise in booking demand for Diwali holidays this year as compared to last year. Hyderabad has emerged as the top destination with the maximum number of bookings for the upcoming Diwali holiday registering a 70% hike in demand compared to last year.
Booking trends also indicate that Bengaluru is the second most popular destination for Diwali holidays registering a 58% hike in demand as compared to last year.
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