Gone are the days when the festive season would mean a huge jump in sales for all kinds of businesses in the State. Due to pan-India slowdown, this year several businessmen witnessed a drop in their sales around of Ganesh Chaturthi compared to last year. Going forward, it is expected that sales are not going to revive even around the festivals of Dussehra and Diwali
Karan Sehgal
Until around a few years ago, businessmen used to wait for the months of August and September for markets to revive after the dull months of heavy rains. Starting from the festival of Ganesh Chaturthi, sales of all kinds of consumer durables, appliances and electronics would pick up.
But, this year, due to pan-India slowdown, markets did not revive even around the occasion of Ganesh Chaturthi. Categories like mobile-phones witnessed a 15 to 30 per cent drop in business compared to last year. The business of consumer appliances like refrigerators and washing machines saw a massive decline of 50% compared to last year.
Vishal Lobo, owner, Digital World (a retailer of mobile phones), said, “Our business has been really low this time. Sales revived a bit on the day of Ganesh Chaturthi but soon after that, the business was back to square one. There is a 25 to 30 per cent decline in our business compared to last year.”
Lobo continued, “People have money, but they are afraid to spend. I think this trend is going to continue for the rest of the year as well. I don’t have any hopes that there will be a revival. Brands are launching new phones once every three months, but even then people aren’t coming to buy them. Moreover, margins on mobile phones are very low at 4 to 5 per cent, which means that we make very little profit on whatever sales we have.”
The extent of slowdown varies from category to category. In the case of mobile phones, there is a slowdown, but the fact that margins are less than 5% makes matters difficult for the business community. Other categories like branded clothes have also witnessed a slowdown, but margins are higher there, which ensures that retailers are slightly better off on a relative basis.
Royson Afonso, owner, Vailankanni Refrigeration & Air Conditioning, said, “The market of consumer appliances did not pick up at all on the occasion of Ganesh Chaturthi. Business around Ganesh Chaturthi was 50% down compared to last year. Moreover, we face stiff competition from online channels. The only thing, which is helping us survive, is our relationships with customers and also that we help them in after-sales service.”
Online marketplaces like Amazon have become active in consumer appliances segment. They provide lower prices and even prompt delivery and installation of products. Consumers have just begun buying appliances from Amazon. In times to come, the online channel will provide even more stiff competition to regular stores selling appliances.
Having said that, the recession is so widespread that even online channels have witnessed a drop in sales for certain categories like laptops and mobile phones. In other categories, the online channel is eating into the share of the offline channel making life difficult for the latter.
Muzaffar Qadri, owner, Jamsons (retailer of laptops and mobile phones), said, “Now the recession is such that even online retailers have seen their business drop. The overall recession is having a huge impact on the sales of mobile phones and laptops because people don’t feel secure to spend on such items.”
Qadri continued, “Although our business revived a bit around Ganesh Chaturthi, it was not as per our expectations. There was a 15 to 20 per cent drop in business around Ganesh Chaturthi festival. Prices have also moved up for certain categories after GST came into the picture. For example, there is 18% GST on laptops compared to 5% VAT earlier, which has affected their sales badly.”
In every category, the impact of slowdown is far more pronounced on smaller brands than on bigger brands. Even otherwise, smaller brands do lesser business. But in times such as these, their sales almost entirely get wiped out.
A dealer, on the condition of anonymity, said, “Brands like Micromax and Nokia are hardly able to sell mobile phones in the market. Other brands like Vivo and Oppo are still managing to make sales.”
The dealers of automobiles like cars and bikes said that their sales have come down by 40% compared to last year. A source informed that only 643 scooters got registered at Margao RTO around Ganesh Chaturthi this year compared to 1,100 scooters last year.
The slowdown is all-pervasive and try as they may, the businessmen are not able to revive the sales even during the festive months. Most of them saw sales volumes dropping significantly around Ganesh Chaturthi and there are no expectations of a revival in the rest of the festive season.
Grim festive season for market across the State
During the occasion of Ganesh Chaturthi, the business of categories like mobile phones, laptops, fridges and washing machines did not pick up at all
This year, due to pan-India slowdown, the market is not able to see any revival even during festival months
Sales of consumer appliances through offline channel have fallen by 50% and those of mobile-phones have seen a decline of 15 to 30 per cent compared to last year
Online marketplaces like Amazon have become active in consumer appliances segment by providing prompt delivery and installation making things difficult for the offline channel
The impact of slowdown is far more pronounced on smaller brands than on bigger brands
