The festival season, starting with Dussehra and continuing till the New Year, is usually boom time for retailers and manufacturers alike. Everything from cars to consumer durables, clothes to mobile phones is in demand. This year, there’s even greater hope riding the festive season, businesses are fervently hoping that demand will pick up, people will spend and hopefully set a happy momentum that will put the economy on the path of a robust recovery. At the very least, businesses are hoping to recover losses incurred during the lockdown, and possibly, earn enough to sustain themselves through the traditionally low-demand months that follow. A view of the central a trium of DLF Promenade Mall in New Delhi. Photo: Chandradeep Kumar There is reason to be hopeful. Many industry professionals that India today spoke to say consumer demand has returned, to varying degrees in different sectors, in September and October, and that this holds out hope for the rest of the festive season. This is not to discount the fact that the Indian economy is in dire straits, most estimates project growth falling nearly 10 per cent this fiscal year. However, a good performance in the festive season could soften the blow and aid a faster recovery. With most parts of the country now reopening after a series of total and partial lockdowns since March 25, the Indian retail sector, pegged at $950 billion (Rs 70 lakh crore) and employing 40-60 million people, is seeing green shoots of recovery. Except in centrally air-conditioned malls, where footfall is low, most retailers are reporting improved sales. Kumar Rajagopalan, CEO of the Retailers Association of India (RAI), which represents about 500,000 stores in organized retail, says the sector has seen a progressive improvement in sales over the past four months, June saw sales at 40 per cent of the figure for the same month last year, with the following three months seeing that number improve to 50 per cent, 60 per cent and 70 per cent. Rajagopalan says a similar trend is being seen in the unorganized sector as well, and that certain segments, such as electronics and mobile phones, are doing better than others. “One [feature of] festive season sales is that people buy not only for themselves, but also gifts for others,” he says, arguing that the festival season could see a much-needed demand boost. However, he adds a note of caution. “This does not mean retailers are out of the woods, many are wary of stocking too much.” HOLD THE BUBBLE Even as retailers hope for a rebound, a note of caution marks their optimism. This stems from fears of a ‘second wave’ of Covid-19 cases, as seen in many European countries, forcing new rounds of curfews and lockdowns. In India, the number of new Covid cases per day appears to be falling, with about 50,000 cases reported on October 24, one of the lowest daily totals since July 28. But with the onset of winter, there is a possibility of that trend reversing. , which could lead to more lockdowns and another sales slump. Furthermore, vaccines for the disease are still under development, and may not be available until next year. Even so, analysts and industry leaders across sectors cautiously report positive developments. In the automotive sector, RC Bhargava, chairman of Maruti Suzuki, India’s largest car manufacturer, says, “Going by retail numbers, sales are definitely [improving]Maruti Suzuki saw a 30 per cent year-on-year increase in sales in September, selling 160,442 units that month compared to only 122,640 units a year ago. Bajaj Auto, a major two-wheeler manufacturer, saw a 10 per cent year-on-year sales increase in September, from 402,035 units in that month last year to 441,306 units this year. The numbers for other automotive manufacturers are more modest. Hyundai Motor India’s sales in September increased only by 3.8 per cent year-on-year, rising to 59,913 units from 57,705 units in September 2019. However, Bhargava adds a caveat for comparisons in October: last year, both Dussehra and Diwali were in October. . This year, the festival season extends over several weeks, as Diwali is in mid-November; therefore, the sales numbers for October are not exactly comparable with those of the same month last year. Even so, on a positive note, media reports suggest auto makers will produce 330,000-340,000 cars in October, the highest monthly output since January 2019. There are several reasons analysts expect auto companies to see improved performance in the festival season. Suman Chowdhury, chief analytical officer at Acuite Ratings and Research, says these include an increased preference for private vehicles because of the pandemic, an improved demand environment in rural and semi-urban areas and increased stocking by dealers in expectation of higher sales due to pent -up demand. Another potential boost to demand comes from the Centre’s LTC (leave travel concession) cash voucher scheme. “The LTC scheme includes [benefits for] Automobile [purchases]and we hope this further improves sales,” says Bhargava. The e-commerce sector, which had already seen robust sales during the pandemic as a result of people preferring to buy essentials online rather than physically visit shops, has seen a further growth over the past few months. Online sales festivals by Amazon, Flipkart and Snapdeal, where deep discounts were on offer, received a strong response in the October 15-19 period. According to estimates by RedSeer Consulting, an online sales tracking firm, e-tailers saw about $3.1 billion (Rs 23,000 crore) worth of goods being sold in the first 4.5 days of this period. This is about 77 per cent of what the consulting firm had projected for the first round of the festive season. The real estate sector, on the other hand, valued at Rs 8.8 lakh crore, has struggled during the pandemic. While there has been an uptick in property purchases in some of the larger real estate markets over the past two months, it is too early to say that buyers are returning to the market. Niranjan Hiranandani, founder and MD of the Hiranandani Group, highlights the
