India's festive shopping season in full swing, economy poised for growth
27 October 2023, Mumbai
Why India
The festive shopping season in India is in full swing, and the country's economy is poised for growth. A recent study by the Reserve Bank of India showed that consumer spending is essential for the economy, making up 60 percent of the GDP.
The study also forecasts economic growth of 6.5 percent for this fiscal year.
Apparel retail getting back to normal
A report by CRISIL, released earlier this week, said that apparel retail in physical stores is getting back to normal after the pandemic. The report said that the retail sector is ready for strong revenue growth of 7 to 8 percent in the fiscal year 2023–24.
This comeback is mainly due to the start of the festive season and the upcoming Indian wedding season.
Retailers adding new store spaces cautiously
The report by CRISIL looked at 39 apparel retailers, who together made a quarter of the Rs 1.9 lakh crore revenues in fiscal year 2022–23. The report also pointed out that retailers are trying to balance adding new store spaces.
While they added 3.7 million square feet of retail space across India in 2022–23, they are adding 2.2 million square feet this year, showing signs of normalcy.
Operating margins to stay at 8 percent
The report said that operating margins will stay at 8 percent in 2023-24, as selling more premium products and lower input costs will make up for higher marketing costs.
The report also said that store expansion will cost around Rs 2,000 crore in 2023–24, the same as the previous year.
E-commerce sales are expected to grow 18–20 percent
A report by consulting firm Redseer said that Indian e-commerce platforms will sell around Rs 90,000 crore worth of goods during the festive season, which is an amazing growth of 18–20 percent from last year.
This increase in sales is expected to come from about 140 million shoppers who will buy products from categories such as electronics, fashion, home appliances, and beauty.
Summation:
The festive shopping season in India is a major economic driver, and the signs are positive for this year. The apparel retail sector is getting back to normal, and e-commerce sales are expected to grow significantly.
This is good news for the Indian economy as a whole, as consumer spending is essential for growth.
5 key insights :
- Consumer spending essential
- Economy poised for growth
- Apparel retail recovering
- E-commerce sales to grow
- Festive season boosts economy
