Onam sales, which come hand in hand with the wedding season, are a bellwether stock for the long string of ensuing festivals like Durga Puja, Dussehra, Diwali and Christmas.
It is the turn of calamity-ravaged Kerala to lead in boosting the country’s sagging consumer appetite, with Onam, the biggest festival of the state, culminating this week. Onam sales, which come hand in hand with the wedding season, are a bellwether stock for the long string of ensuing festivals like Durga Puja, Dussehra, Diwali and Christmas, and traders in Kerala have been counting on at least Rs 50,000-crore of extra business through sales in white goods, textiles, gold and sundry goods.
This time, the Onam season enjoyed a long one-month spell as Thiruvonam falls on September 11. Though rains and landslides in first week of August brought back nightmares of the humongous floods and the crushed Onam business season of August 2018, the weather god finally smiled.
The growth of car sales in Kerala has always been linked to plantation fortunes. There is even a saying that as rubber price shoots up, the number of posh showrooms for four wheelers multiplies in the Kottayam-Idukky belt. This week, the rubber sheet is priced at Rs 138-139 per kg, indicating an 8% fall during the month. Decline in income from rubber, tea and coffee and the countrywide auto biz slowdown have had car dealerships downing shutters in Kerala too.
The only cheerful horn hoot is from Isuzu Motors, which opened a showroom in Kannur this week. “We see an increasing demand for our range of D-Max pick-ups and mu-X in Kerala,” says Takeshi Hirano, VP (sales), Isuzu Motors India.
One percent state flood cess, in addition to 28% GST, has been harsh on two-wheeler buyers. But it does seem that the surge in earning opportunities for students in Uber and Ola and Swiggy and Zomato food delivery jobs have resulted in additional money in their hands. Industry analysts say by preliminary estimates, there has been an increase of 5-8% in two-wheeler segment in Kerala during Onam.
There is not much of a slowdown in the white goods market, except in entry-level TVs. “Last year, floods had hit our sales. But we feel that the pent-up demand of last year would translate into consumption this year,” says Abhinav Kumar, sales head of a premium home appliance brand.
In AC sales, the rise in summer temperature had played the saviour. Kamal Nandi, business head and EVP at Godrej Appliances, said this helped in making their first quarter “very good”. He, though, feels it is tough to keep up that momentum. “But because of low base from last year in Kerala, we expect to log a double-digit growth.”
For Voltas too, the AC market grew 163% in Q1 in Kerala. Pradeep Bakshi, MD, Voltas, said “the slowdown is a challenge”, but a slew of “consumer finance schemes with easy instalments” could do the trick.
The home appliance market expects Rs 800-crore sales in Kerala in the August 15-September 15 period, as it eyes Rs 2,000-crore sales in the current financial. “Last year, the Onam season home appliance business was dull by at least 30%, though later there was a flurry to replenish essential kitchen appliances damaged by floods,” says Anoop Satheeshan, sales manager of a leading home appliance trader.
Floods or no floods, Keralites’ romance with the spirit had whipped up state-run BEVCO’s liquor turnover to Rs 14,508 crore in 2018-2019, its highest sales ever, with brandy emerging as the top favourite. This year, BEVCO anticipates a seasonal sales surge of about Rs 230 crore.
In gold demand too, Kerala beats other states, thanks to the festive spirit of its Gulf-based NRI diaspora in vacation on the home turf and the wedding season. Rural Kerala’s per capita spend on gold is Rs 209, while for urban Kerala, it is Rs 189.9 – both being the highest among states. The state’s per day gold sales during the Onam season is as high as 200 kg. “We anticipate a 25-30% growth in Onam sales, although the trend would be to go for lightweight jewellry rather than chunky pieces,” says MP Ahammed, chairman of the Malabar Gold & Diamonds.
About 30% of Kerala’s Rs 10,000-crore textile trade happens in August-September. Traditional Kerala handloom was gravely shaken by 2018 floods as one of its weaver villages in Chendamangalam suffered big losses. “2019 is a bounce-back year, despite the continuing climatic odds,” says TS Baby, the president of a weaver society in Paravoor.