MUMBAI, Nov 11 (BSS/AFP) - Indian retailers hope to boost disappointing consumer spending with a frenzy of special offers during this week's Diwali festival, led by automakers crowding the market with nearly 20 new cars.
Diwali, the Hindu festival of lights, has always been an
auspicious time to splurge, sparking an annual race between
retailers to provide the most attractive offers.
But in this year's flagging economy, overcoming consumers'
trepidation may prove to be a difficult task.
"I haven't seen so many product launches in a short span of
days ever," said Ankur Bisen, vice-president in retail with
Technopak, an Indian consultancy firm.
"Cars, luxury jewellery, watches, tablets, iPads, even
Microsoft's Windows 8, retailers are trying new product launches
to attract consumers," he told AFP.
Months of gloom for the Indian economy have brought consumer
spending down to seven year lows, according to the Fitch ratings
agency, so businesses are desperately seeking a kickstart.
This Diwali, Indians will be lured into buying from an
impressive range of small cars, sedans, utility and luxury
vehicles launched by auto giants such as Ford, Maruti Suzuki,
Mahindra Ssangyong, BMW and others.
Auto dealers are offering a twin attraction -- higher
discounts on cars bought and better exchange prices for old cars
-- to boost what has been a forgettable year for India's car
market amid rising input and fuel costs.
Electronics giant LG has "blissful offers" to woo customers,
giving away a range of Blu-ray players, camcorders or glasses --
all 3D versions -- free with selected high-end 3D smart
Rival Samsung is offering a free Galaxy 7.0 tablet with the
purchase of certain smart TVs, refrigerators or washing machines,
while the hot-selling iPhone5 has also hit the shelves this
Indian banks, struggling with bad debts, are also trying to
State Bank of India, the country's largest commercial bank,
has cut its processing fee on home and auto loans by half, for
loans borrowed between mid-October to the end of the year.
Others have taken similar steps to remain competitive and
some have slashed their auto or home loan rates, despite the
central bank's tight monetary policy, analysts said.
Companies are hoping their eye-catching offers will tap
India's expanding middle-class as it fast moves to a more
Western-style consumer economy, but the Diwali spending rush has
its roots in traditional India.
"October is the start of the agricultural new year and
generally festivals are times to 'bring in the new'," said
Mahantesh Sabarad, auto analyst with Fortune Equity Brokers.
With each festive season, the demographics of shoppers are
quickly changing as more and more young people and women join the
workforce, giving them disposable incomes to spend as they wish
on mobiles, jeans and pizzas.
"It's a no-brainer that Diwali will be competitive," said
Pramod Gubbi, vice-president at Mumbai's Ambit Capital, as firms
vie for these new consumer groups' attention.
But the rush of discounts and offers still may not be enough
to get consumers opening their wallets for pricier items in the
A range of factors -- rising fuel prices, food inflation,
job uncertainties and muted wage hike expectations -- are likely
to hurt buying decisions, said Deep Mukherjee, director with
India Ratings and Research, a Fitch group firm.
"Big ticket items like autos, luxury products, vacations,
may face a challenging demand condition," Mukherjee said.
Even gold-buying, which usually peaks in Diwali and
continues through to India's wedding season in December, is
Jewellery showrooms around Mumbai's Zaveri Bazaar have
remained half- empty during the festive season so far, with the
price of gold close to record highs.
B. Mahesh, an executive in a textile export firm, said he
had "reconciled to not splurging this Diwali".
"I usually buy three branded pairs of shoes each year, one
always in Diwali. But now I'm going to look for cheaper footwear.
I do not see a Diwali bonus coming and prices are just too
steep," he said.