Diwali 2008 was not all the bright, especially for Consumer Electronics companies and White Goods Consumer durables. Sales from Companies to Dealers was as expected while last mile sales from dealers to consumers took a beating and was down 8-10% this festive season.
Typically in the Indian retail scenario, 35-40% of retailers annual sales are recorded in the Sept-Dec festive season period. However, retailers are worried about the Diwali stock which has piled up. LG Electronics India MD said,
The era of hardening interest rates, liquidity and downturn in real estate have taken toll on consumer sentiment. Several trade partners have indicated festive season sales have been below expectations.
Haier India, Director Pranay Dhabhai said,
Unlike previous year when sales would pick up 10-15 days ahead of Diwali, consumers started their purchases this year only on Dhanteras. This might impact our sales in November.
However, sales from organized retailer stores have gone up YoY. Future Groups eZone recorded a rise of 20-25% in sales as per expectations. The real estate downturn is specially true for Bangalore. Pioneer of Indian retail, Mr. Kishore Biyani said that Bangalore weak sales in White Goods due to falling sales of Real Estate.
Adding woes to white goods sales during festive season was the tight financing by banks and credit card companies. GE Money and Citi Financials have already vacated this segment.
Update:
Here is what different organized retail managers said to J.P.Morgan,
- We have seen good customer entry and conversions, contrary to perceptions. We should see same store growth in the region of 7-8%.
- We have had a satisfactory performance and in some categories, such as jewelry, we have exceeded expectations.
- Initial start to Diwali sales was somewhat sluggish but thereafter it picked up significantly and towards the end we achieved most of our targets.
- Considering the overall market conditions our performance has been satisfactory. We have seen growth of about 25% in branded jewelry sales [This Retailer is mot likely Gitanjali Gems]