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Uptick in consumer sentiment and GST rate cut to boost festive season sales, feel brands

Hoping for a bumper festive harvest after two years, brands have lined up various discounts and special products to make the most of the upcoming season. Upbeat consumer sentiment, GST reduction for white goods and rationalisation likely next month will play the catalyst

After two gloomy festive seasons that were hit by demonetisation and implementation of the goods and services tax (GST), brands are hoping that upcoming festive season would brighten up their sales.

The festive season starts after Shraadh – a month considered inauspicious for new purchases according to the Hindu calendar — and continues until the New Year. The season constitutes around 50% of all kinds of sales as the market sentiment is at its peak.

"In 2016, the post-Diwali sales were dampened by demonetisation in November. So the Christmas-New Year season was subdued. Then, because of GST, the 2017 season was kind of washed out as the market sentiment was hit," a brand head said.

"This year, the monsoon is doing good. Also, there seems to be more cash in hands of consumers because of GST rate cuts. More reduction is likely on white goods as hinted by Union minister Arun Jaitley in his blog. So, companies have more reasons to look forward to the upcoming season," the brand head added.

According to experts, this season is equally important for both brick and mortar and e-commerce retailers. The latter does resort to pop-up sales such as a ‘big billion day sale’ or a ‘mega sale’ a couple of times in a year but still there's no match to the festive season business.

Harish Bijoor

Explaining how e-commerce platforms have managed to create their own festivals, Harish Bijoor, Founder, Harish Bijoor Consults Inc., said, “To a large extent, e-commerce is also bitten by the festive bug. Festivals are those that are traditional, and those that are created by e-commerce outfits. ‘The Big Billion Day’ is a festival as well!”

But he also said that despite the ubiquitous nature of sales and offers, the festive season still holds a lot of importance for brands and marketers.

Aiding the festive season demand is a good monsoon, which puts more money in the hands of rural consumers. FMCG and auto segments are going to be the biggest gainers of this.

Sandeep Verma

Sandeep Verma, President Sales & Marketing for Bajaj Corp Ltd., said, "In states like Maharashtra, there is a very significant uplift when it comes to the festive season. 30% of the year’s consumer off-take happens during the months when the Abhyanga Snana happens in Maharshtra. Similarly, in West Bengal, a 20% increase in sales can be seen during the Durga Puja month. Also occasions such as Karva Chauth and Teej are very important in the Northern belt and we see increased sales there as well.”

Verma said that the brand increased their marketing spend in proportion to the increase in sales during these months.

The festive season is also the time when brands launch new festive packages. Patanjali spokesperson S K Tijarawala said the brand will launch ‘Happiness Packages’ during the festive season and these will include products across categories.

SK Tijarawala

“We no longer need to tell people that we sell natural and chemical-free products, we also don’t need to tell people that we have the best price. We are beyond that and therefore this festive season, our big focus will be on ‘happiness’. We will be launching ‘Happiness Packages’ from September,” said Tijarawala.

Patanjali is not the only brand that will launch special packages or products during the festive season. Cadbury Dairy Milk, known for its special ‘Celebrations’ packaging during the festive, will experiment with the chocolate itself for Friendship Day. Consumers can also customise the packaging according to their needs when shopping for Cadbury Dairy Milk online.

“The behaviour of buying and gifting chocolate online is just starting in India and we want to be category creators. We have associated with all the key partners. We have an online shop on Amazon and we allow personalisation there. We want to drive basket penetration and are sorting out the backend. A lot of chocolate consumption typically happens outside home so our objective from a strategic standpoint is also to get people to stock chocolates at home,” said Anil Viswanathan, Director, Marketing (Chocolates), Mondelez India.

Shivaji Dasgupta

According to brand consultant Shivaji Dasgupta, brands can stay ahead of the game and still leverage the festive season by focusing on the ‘customised festivals’. “Customers are spending more money on ‘customised festivals’. Brands must do a lot more, especially create limited-edition festive brands to reinstate the meaning of festivals as a special consumption occasion,” said Dasgupta.

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