Lower GST and Navratri Kickstart Festive Sales Surge
The recent implementation of a new Goods and Services Tax (GST) regime has sparked a significant surge in consumer spending across various sectors. As the festive season of Navratri begins, retailers are witnessing a remarkable uptick in foot traffic and sales. Major automotive companies like Maruti Suzuki and Hyundai reported record deliveries, while demand for electronics and fast-moving consumer goods (FMCG) also soared, indicating a robust market response to lower tax rates on essential products.
Automotive Sector Sees Record Sales
In the automotive industry, Maruti Suzuki reported an impressive retail performance, with over 25,000 units delivered on the first day of the new GST regime. Partho Banerjee, the company’s senior executive officer for marketing and sales, noted that the demand for small cars surged, driven by substantial price cuts that exceeded the GST reductions. The company anticipates closing the day with around 30,000 units sold, bolstered by more than 80,000 inquiries, particularly for small cars, which saw a 50% increase in interest. Hyundai also celebrated a milestone, achieving its highest single-day dealer billings in five years, with approximately 11,000 transactions. COO Tarun Garg attributed this success to strong festive sentiment and heightened customer confidence.
Electronics and Home Appliances in High Demand
The electronics market is experiencing a similar boom, particularly in the sales of televisions and air conditioners. Retailers have reported a notable increase in demand, especially for larger screen TVs, as lower prices attract more buyers. A leading retailer in Noida mentioned that despite it being a Monday, typically a slow day for sales, their stores recorded double the usual deliveries. Nilesh Gupta, director at Vijay Sales, expressed optimism about the ongoing festive season, anticipating that consumers will make multiple purchases due to increased disposable income from the new GST rates.
FMCG Sector Anticipates Strong Growth
The FMCG sector is also gearing up for a busy festive period, with companies ramping up supplies to meet expected demand. Mayank Shah, vice president at Parle Products, indicated that supplies have increased by 25-30% in anticipation of a strong growth trajectory this year, projecting a 15-17% increase compared to last year. The FMCG distributors’ association noted that deliveries to retailers are now occurring under the new GST rates, which are expected to encourage a shift from unbranded to branded products as the tax gap narrows. Sudhir Sitapati, MD and CEO at Godrej Consumer Products, highlighted the early momentum in demand for high-value categories, particularly in electronics and large appliances.
Retailers Optimistic for the Festive Season
Retailers across various sectors are optimistic about the upcoming festive season, with many expecting significant growth. Fashion retailer Libas aims for a 20-30% year-on-year increase in sales, while early data from Amazon’s Great Indian Festival indicates substantial growth across multiple categories, particularly in premium segments. Saurabh Srivastava, VP of categories at Amazon India, noted the positive trends, suggesting that the festive season could yield impressive results for retailers. As consumer confidence rises and spending increases, the overall market outlook remains bright, signaling a promising end to the year for businesses across the board.
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