Diwali 2021: What small retailers expect this festive season after negligible business last year

By: |
Updated: September 09, 2021 3:43 PM

Ease of Doing Business for MSMEs: While consumers had planned shopping during last year’s festive season as well, 75 per cent were inclined towards making online purchases.

Now having battled the two waves of the pandemic and understood the buying behaviour of consumers in the new normal, small businesses including retailers are hoping to get their mojo back to some extent this festive season. (PTI)

Ease of Doing Business for MSMEs: This year’s festive season would be the moment of truth for micro, small and medium enterprises (MSMEs) across multiple offline consumer-facing sectors after the dampened show last year. That’s also because the online channel or e-commerce had seized the opportunity last year to pull shoppers onto the digital medium for both recreational and essential shopping, thanks to the Covid-induced tailwinds. Now having battled the two waves of the pandemic and understood the buying behaviour of consumers in the new normal, small businesses including retailers are hoping to get their mojo back to some extent this festive season as the rate of vaccination continues to go up even as the fear of third-wave lingers on in the background. 

“There is definitely some sense of optimism for this year’s festive season. While the third wave’s fear is there but it seems the vaccination programme is well on its way to take care of the situation. So, the big silver lining is clearly the vaccination programme. If this continues, most of the retailers will plan for a big festive season while many are expecting growth over 2019 levels. This season would be of cheerful shopping from last year’s,” Kumar Rajagopalan, CEO, Retailers Association of India (RAI) told Financial Express Online. 

While consumers had planned shopping during last year’s festive season as well, 75 per cent were inclined towards making online purchases in comparison to 66 per cent who had planned to opt for standalone shops, according to RAI’s festive shopping index 2020. Apparel shopping and eating out have always been the top indicators of how well the consumer sentiment has been during the festive season. 

“Electronics and food segments are already doing good. The real indicator is garments after food. The second-largest category of consumption in India is garments or textiles which hasn’t been as successful yet. Here the feeling of enjoyment during the season to go out and meet friends and relatives is important as the office wear segment is still impacted. So, growth would come if casual clothing and festive clothing recover. That will be the big cheer,” added Rajagopalan. 

The domestic textiles and apparel market was around worth $100 billion in FY19 and is likely to grow to $190 billion by FY26, according to India Brand Equity Foundation. According to a recent ICRA report, textile exporters in India would be seeing a 20-25 per cent during the current financial year. Moreover, the government on Wednesday had approved the Production-Linked Incentive (PLI) scheme for man-made fiber-based apparel and 10 segments of technical textiles with a budgetary outlay of Rs 10,683 crore. Also, export-incentive schemes such as Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) are expected to boost the textiles sector. 

Subscribe to Financial Express SME newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises 

“Textile sector is doing good while the growth in exports is also looking to pick up. The sector majorly has MSMEs. As far as expectations from the festive season is concerned, textile and apparel businesses are definitely expecting it to be better than last year’ season. While one won’t expect the markets to be crowded like before Covid, but it won’t be sombre like the previous year. The trend is towards improvement in sales while reaching 2019 levels will take some time. Businesses have now been used to the Covid environment and they know how much goods to stock,” Ashok Juneja, President, The Textile Association (India) told Financial Express Online.

“The government’s initiatives like RoSCTL, RoDTEP, PLI scheme, etc., will help MSMEs do better during the festive season. The demand is likely to go up from last year,” VD Zope, Chairman, The Textile Association (India) told Financial Express Online.

Delhi-based RK Vij of Indorama Synthetics, which is into the polyester fabric, said businesses are expecting improved sales from this month onwards, coming out of the second wave’s impact. “We have already been running our plant and the growth this season is expected to be around 15-20 per cent in the production and subsequent sales. We are more prepared this time amid a possible third wave and expect less impact on sales,” Vij told Financial Express Online.

Likewise, Viva Hospitality, which owns the quick-service restaurant brand Imly, sees the confidence coming back to a fair extent this year in comparison to last year as consumers have returned to eating out with families and friends post second wave. Hospitality was among the sectors that witnessed maximum disruption last year as lockdown-related restrictions forced eateries to shut temporarily and consumers to stay inside their homes.

“Restaurants this year started opening up in June itself after the second wave. So, the relaxation post-Covid is there now while a lot of people have already been vaccinated. The situation would be much better this season. We have recovered around 60 per cent while our bar concept called Duty Free has got 80 per cent recovery done in comparison to just 30 per cent last year from pre-covid levels,” Varun Puri, Co-founder, Viva Hospitality told Financial Express Online. Puri added that he had to shut four outlets during the Covid period as landlords were not ready to negotiate with the rentals. However, they were also able to open three new outlets amid Covid itself.

“Festive season gains will nowhere be close to what we have lost but it will help regain some confidence. If there is a third wave, it would definitely hit the confidence but restaurants are better prepared this time,” Puri said. However, according to Rajagopalan, the purchasing pattern might take a dip during the festive season if there is a third wave as people won’t celebrate the time with a sense of optimism and would prefer again not to move out to shop or meet relatives or friends.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.