Demand for gold in the country increased about 7.7% by volume to an estimated 42 tonnes and 10% by value to ₹22,000 crore, according to the India Bullion and Jewellers Association (IBJA). Gold prices fell about ₹1,500 per 10 gm in two days to ₹60,400 per gm on Friday, helping drive sales.
Sales of the worst affected mass-to-mid segment products across categories have also seen a slight improvement in this season with single-digit growth, according to companies, retailers and market researchers. The revival has been driven by urban and semi-urban markets, with the critical rural markets still showing no signs of a recovery, they said.
Dhanteras is considered auspicious for buying gold and jewellery and traditionally records the highest gold, jewellery and electronics sales in India in a single day, while the festive season, the period between Navratri and Diwali, is the peak period for consumer goods sales in the country.
Mobile phone market tracker Counterpoint Research has estimated about 8% volume growth in smartphone sales this festive season, higher than its initial projection of 7% three weeks ago.
World Cup boosts sales
This is higher than the pre-Covid-19 growth of 7% in 2019.
Sales of appliances such as refrigerators, washing machines and air-conditioners have increased about 20% year-on-year by value this festive season, according to industry estimates, while volume growth has been 6-7%, indicating premiumisation drove sales, said executives.
Simultaneously, the ICC Men’s Cricket World Cup and Team India’s winning streak catalysed sales of restaurants, especially on days India played its matches and on festive days. Television sales got a cricket boost as well, surging a record 30%-plus.
Ecommerce platforms like Amazon also said their festive sales have been the best ever, with 80% consumers shopping from tier-2 and tier-3 towns.
However, a wide section of the industry said demand needs to be monitored beyond the festive season to see whether the sales surge signifies a sustainable recovery or just a festive jump.
Dhanteras bonanza
Surendra Mehta, national secretary of IBJA, said the initial apprehension of jewellers has been allayed with the fall in gold prices as the Israel-Hamas war has not escalated and there is talk of a ceasefire.
Suvankar Sen, managing director of Senco Gold & Diamonds, said since gold prices were high and volatile, volume growth on Dhanteras was in single digits whereas value growth was in low double digits. “Offtake of diamond jewellery has been good. Gold coins of 1-5 gm and lightweight earrings have flown off the shelves quickly,” he said.
Smartphone, electronics recovery
Tarun Pathak, research director at Counterpoint, said longer tenure financing options in the Rs 10,000-plus segment, 5G handset launches in the budget segment and more options in the sub-Rs 10,000 segment have driven smartphone sales this festive season.
LG India has seen a 32%-plus surge in television sales in the festive season. Online-focused television brands such as Kodak and Thomson have sold out their entire inventory. Haier said it sold its highest number of 55-inch plus screen size televisions, side-by-side refrigerators and front-loading washing machines.
“Low and mid-end appliances got sold in cities, but the demand momentum is not as high as at the premium end,” said Godrej Appliances business head Kamal Nandi.
LG India’s business head, home entertainment, Gireesan Gopi said while urban and semi-urban markets boosted sales, demand in rural areas remained muted.
New clothes, eating out
Apparel and fashion-focused retail chains and companies, including Shoppers Stop, V-Mart Retail and Arvind Ltd, said in their recent earnings calls that there has been an improvement in apparel sales in the festive season. Go Fashion (India) said it saw 4-5% same-store growth on Durga Puja in eastern India. Shoppers Stop said it expects mid-single digit growth in the December quarter based on festive growth.
However, Punit Lalbhai, vice chairman, Arvind Ltd, told analysts, “While there is an uptick because of the festival and I do expect it to improve, it is not as good as in what it is in a normal or good year.”
Sameer Khetarpal, CEO of Jubilant Foodworks, the operator of Domino’s chain, said on days when India is playing, there is an uptick. “We just got off Navratri and the last few days have been good for us,” he told analysts.
