Herald: Gold sector aside, no Diwali fireworks for retailers in Goa

Gold sector aside, no Diwali fireworks for retailers in Goa

12 Nov 2018 04:01am IST
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12 Nov 2018 04:01am IST
Leave a comment

The Diwali season is very important sales booster in the larger retail universe. AJIT JOHN spoke to businessmen in different sectors to ascertain how business has been for them this time around

Diwali is a time to loosen those purse strings and spend on clothes, white goods, jewellery and sweets. The market may be tight and everyone has exhibited fiscal conservatism right through the financial year. Perhaps now there has been a dramatic infusion of cash into the retail market prompting retail business owners to quietly smile at the return of the goods days. Or has it. 

The time for festivals is the time to purchase jewellery. A walk around the city of Panjim visiting the various jewellers revealed an interesting tale.  Many of the people said that business was excellent. The general tone was one of relief that business was being conducted with such fervor. 

As one of them put it “It is a relief that the Goddess Lakshmi has entered our shop after a while. Business has not been transacted like this for a while in our outlet.” 

Another Mumbai based jeweller with an outlet in Panjim said “I transacted around Rs 3.5 cr worth of business the day before Diwali. It has been good. Our outlet in Mumbai conducted business worth Rs 8 cr odd. It was a good day overall. It has been tight since Ganapati with not much of business being transacted.” 

Another jeweller said “We experienced a dramatic jump in business in the run up to Diwali but otherwise on the whole it has been a very disappointing year.”  

Pramit Surendra Raikar, president, Goa Gold Dealers Association said “After months of lull, jewellery buying revived in the last one week as consumers rushed to book their share before any further rise in gold prices. The gold prices jumped by almost 5% in October to trade at Rs 3240 per 10 gms 999 purity following global cues. Due to the fall in rupee value, gold got costlier and therefore the consumers are rushing to book their share in gold before any further escalation in prices in the Indian rupee.” 

Gold he said had proved to be safe heaven at a time when other asset classes including equity, currency, real estate and mutual funds had shown pullout and also because of high liquidity value. This improved sentiment, he felt had set a tone for a robust festive season especially for Diwali, Dhanteras and the upcoming wedding season. Consumer sentiment, he believed had now revived when one compared it to six months earlier and this was visible in the high turnouts of customers leading to more business.

Raikar went on to say “The falling rupee made prices costlier in the Indian currency with consumers feeling the pinch with the high duty of 10% levied in the country. The peculiarity of jewellery purchase in India is that consumers book the highest quantity of ornaments when gold prices moves up. The case is no different this time. This indicates that ongoing festive season will see a rise in jewellery sales. To attract consumers, many jewellers are offering freebies and discounts on making charges to compensate for the rise in gold prices.The season beginning from Dussehra and continuing till Dhanteras and Diwali gives a fairly long period for consumers to buy jewellery in anticipation of future prosperity. I also believe the centres launch of a sovereign gold bond with guaranteed periodic returns has also impacted bullion sales in the country.” 

While that may be the case of the jewellery business, the white goods business has experienced a shellacking like never before. One of the largest white goods dealerships in Panjim with outlets across the State was empty a day before Diwali. A day before Diwali, the store was empty and the store manager who did not want to be named was making social calls on his mobile phone. 

He said “Look around, this has been the case the entire festival season from Ganpati, Dussehra, nothing no business. These days I have people walking in with measuring tapes to take down measurements of air conditioners and fridges. They check the prices online and then come to our shop to check the measurements. As an afterthought they will enquire about the prices of this television set and that fridge and just walk away. I sold two refrigerators so far, that’s it. Nothing, this is not Diwali but Diwala. How long can we continue like this, I don’t know.”  

Another white goods dealer who has now moved into other businesses said there had been a 20% to 25% drop in business over the same period last year. He said “The sales of mobile phones, fridges and television sets had dropped dramatically.”    

If that is the case then does it mean Goans have stopped buying television sets, mobile phones and other white goods and turned to reading books or more traditional modes of entertainment. Perish the thought. The average Goan, especially the young Goan is very clued into technology. He is now buying his or her clothes, shoes, electronic goods online. 

The retail business owner said “They are all now buying their television sets, fridges online. Until and unless we unite and fight this trend we are going to be wiped out. How can we compete with the discounts they benefit from online? Ok, when it comes to after sales service, these online sites do not offer it but then when people see those discounts, they forget all this.” 

A distributor of a multi-national electronic commerce and cloud computing company based in Panjim said business had increased dramatically in the run up to Diwali. He said “Today in Panjim, I have to be personally involved in distributing 350 packages. Overall, I have to distribute around 800-900 packages today with a staff of 4. It has to be done. This is the festival shopping. During regular times, we have around 350-400 packages to distribute every day.” 

An employee of the American electronic commerce and cloud computing company which has an office in Verna said there was a 10% increase in business over the same month last year. These days he said they were sending out around 10,000 packages everyday which was a 50% increase over other days when it a regular time of the year. 

The rather cagey responses from automobile dealers gave an early indication of the not so satisfactory performance of various brands.  The managing director of Quadros Motors Evencio Quadros said the sale of Vespa and Suzuki bikes were not as good as last year and preferred to leave it at that. 

With regards to the Jeep Compass he said “We have had very good bookings of the new model but there have been serious supply constraints. Around 80 to 90% of our sales have come from that variant. We have an order book of 17 but we have sent out 5 of that variant. That’s the situation.”

GaurishSakardande, Group GM, Priority Motors said “We are sailing in the same boat as the other dealers, deliveries have been less, bookings take place but the culmination of the entire process is so slow. Its agonising. With regards to Renault we sold 100 in October and have completed 28 deliveries. With regards to Skoda we delivered 20 last month and this month 5 so far. We may touch 80 this month. Overall there has been a 15 % to 20% drop over Diwali last year. 2016 was very good”

Other sales managers speaking off the record said it was a very poor Diwali and the market had experienced a drop-in sale of around 8-15% in sales over the same period last year.

Perhaps the words of a designer who has an exclusive outlet in Panjim summed it best “It’s not rocking. I have already moved on from Diwali, its just not happening business wise”.  
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