What are people buying now?

What are people buying now?

Usha Vaidyanathan, a middle class Indian in her fifties, is probably speaking for an entire generation of Indians when she says, “It is not what we buy that marks a festival but the essence of the festival and its significance.” 

It’s not what they buy, but buy they will. Like Prathibha P, a housewife, explains: “Every year, during the Varamahalakshmi festival, it is a tradition for us to buy something. Not necessarily gold or anything big, but perhaps silver or saris.”

Lasya Bhaskar, who is in her mid-twenties, echoes Prathibha’s sentiments. “The festival season is a time to celebrate. We buy little things, but don’t really make big buys. The big buys are made when we actually need them,” she says. Traditionally, for most Indian consumers, the festival season that typically starts in August-September, is the time to go on a shopping spree. This is the time of discounts, and sales promotions. Our cities are dotted with hoardings that entice consumers with offers. There are ‘Buy One, Get Three’ offers, ‘Scratch and Win’ offers, Exchange offers and more.

No slowdown worries
What happens in times of recession?  Last year, the consumer confidence index released by Nielsen India said, “The amount spent on home improvements (27%) and new technology (27%) has been impacted by the rising inflation rates and they have dropped by three and two percentage points respectively.”

Has the scenario changed this year?
The consumer confidence index this quarter has some good news. Released a few weeks ago, it has risen by 13 points, and India is ranked second behind Indonesia in consumer confidence. Also interesting is the observation that: “The overall spending of Indians has increased. Areas where Indians are interested in spending their spare cash are home improvements/ decorating (34% and 5th highest globally), new clothes (33%), new technology products (32% and 6th highest globally).”

The report notes that the number of people putting their spare cash into home improvements has increased considerably. Spare cash spent on new technology products has also gone up by 5 per cent.

Big ticket buys
Vijay PerinchVijay Perincherryerry, art director at an advertising agency, couldn’t agree more. Just two months ago, he bought a laptop for Rs 1.46 lakh. Wasn’t he wary of making such a big buy considering it is slowdown time? “I had always wanted to buy that particular laptop.

I researched extensively for a year, talked to a lot of people, and planned for it. So, recession or no recession, I would have still bought it,” he explains. The Indian habit of ‘saving for a rainy day’ could probably explain such big buys in times of recession.

Perincherry knew he wanted a laptop, and therefore, worked out his finances accordingly. The survey says savings still find favour with Indians. Nearly six out of ten  Indians (66 per cent) put their spare cash into savings. Perincherry, who has just finished his Onam shopping, explains, “Onam is a special time for us. My wife and I just finished buying gifts for the family, from DVDs to clothes for everyone. After all, it is only once a year that we buy, so no hassles there,” he explains.

‘Spending needs to pick up’
While consumers have budgets and either limit their wants or buy within their means, how does this reflect on sales? Balaji Ramamurthy, Sales Manager, Regional Office of Viveks, the home appliances store, explains, “It is actually not the economy which has slowed down, but customers’ sentiments that have been disturbed. Though the festival season has started we see that the customers are really conservative when it comes to spending. Customers are buying only if they really are in need of a product. Sales have dipped significantly when compared to the same season last year.”

Glitter fest
Not so, it seems, when it comes to gold. Indians have traditionally bought gold to mark important occasions. According to C Vinod Hayagriv, Managing Director, C Krishniah Chetty & Sons P Ltd, “Slack business has always been made up by festival buying. The tradition of buying jewellery is strong as it is a part of Indian culture. And clients always find more to choose from during the festival season.” He explains that the sales during Akshaya Tritiya/ Varamahalakshmi/Ganesha Chaturthi was actually 15 per cent higher than sales during the same time last year. He expects a similar increase during the Dasara-Deepavali period.

Gopi Krishnaswamy, CEO of Insight Instore, a firm that gauges shopping trends through market research, says: “When it comes to luxury brands, the recession has definitely had an impact when on buying. The luxury segments like Plasma TVs may not find many takers. On the other hand, thanks to the recession, traditional retailers and the kirana shops have benefited immensely.”

But India has always been a different market when compared to the global scenario. India, after all, is the largest consumer of gold, he explains, and adds that, whether recession or not, people are definitely going to buy some quantity of gold. Even though consumer spending has risen this quarter, many Indians are still watching their wallets, and some said the return to frugality would not be temporary.

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