Right from the Big Billion Day sales to the end-of-season sales, the discount-hungry Indian consumer is craving for more, helping companies to beat the slowdown blues.
India's growth outlook has weakened sharply this year, with a crushing slowdown that started with the non-banking finance institutions and spread to retail businesses, car-makers, home sales and heavy industries.
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GDP growth declined for the third straight quarter to an over six-year low of 4.5 percent for the second quarter ended September 30, down from 5 percent recorded in the Q1FY20 as manufacturing slumped on low domestic consumption. This despite a recent series of fiscal stimulus, including a sharp reduction in corporate tax rates.
But consumers have not gone into hiding. That’s because companies have stepped up discounts on products. The four golden words of trade these days are – deals, instant discounts, cashback and special offers, according to them. These tactics seem to working.
Take aviation. Air traffic data for November shows the number of passengers grew at its fastest pace in 2019. One big reason for the double-digit growth in air passenger traffic was because airlines offered consumers big discounts in November.
While Air India offered a discount of 25 percent on economy fares, Air Asia offered a 10 percent discount on flight tickets. IndiGo and SpiceJet too offered special deals and cashback. This trend of discounts reflected in air tariff data.
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Airfare data sourced from MakeMyTrip reveals that airfares in October dipped by 6.5 percent year-on-year when compared with the same period last year.
A similar trend was reflected in the month of November, with a dip of 6.6 percent year-on-year. Some sectors which saw a considerable dip in average airfare in November YoY included Delhi-Patna, Hyderabad-Chennai, Delhi-Ranchi, Delhi-Indore, Mumbai-Patna, Kolkata, according to data sourced from MakeMyTrip.
Similar was the case in the ecommerce space. Jaw-dropping discounts on apparels, bags, shoes in the range of 60-70 percent incentivised consumers to loosen their purse strings.
Data sourced from consulting firm Red Seer revealed that etailers in India generated about Rs 19,000 crore of Gross Merchandise Value (GMV) during the September 29 - October 4 festive period.
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The travel booking space, which offers deals on hotel bookings, also saw consumers making good purchases. For instance, Booking.com, which has about 55,000 properties in India, saw good growth in both domestic and international property bookings.
"Despite the economic slowdown, November and December have been fantastic for Booking.com. India is our fastest-growing market in the Asia Pacific region. We grew by 70 percent in terms of room supply in 2019 in India,” said Ritu Mehrotra, country manager, India, Sri Lanka and the Maldives, Booking.Com.
Passenger vehicle makers continue to offer promotional pricing in November, albeit with a reduction in the quantum of the discounts. Major automakers like Maruti Suzuki, Hyundai, M&M and Tata Motors have extended their promotional offers this month, finding it hard to convert buyers in the absence of discounts.
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In the two-wheeler space, Hero MotoCorp has tapered down discounts but continued to offer cash discounts in the month of November. Bajaj Auto and TVS, on the other hand, have rolled back discounts on their products to reduce the price gap between their BS-IV models in the market ahead of them rolling BS-VI products either by the end of the year or the start of next year.Dealers say that while there was positivity spilling into the first week of November after the festive period, dealers have found that few buyers have returned to showrooms after fresh stock rolled into auto dealerships, and the forecast going forward is, therefore, not celebratory.