Financial \n Chronicle<\/i><\/p>\n
Mumbai, \n December 31, 2013<\/i><\/p>\n
It\u2019s \n holiday season. The Oberoi Mall, in a far-flung western suburb \n of Mumbai, is decked for the occasion: golden bells are strung \n in the eaves; cotton floss circles the huge Christmas tree like \n vanilla ice cream. The well-lit stores in the mall are buzzing \n with jittery shoppers who are crowding the aisles but not the \n billing counters.<\/p>\n
As the year 2014 dawns, the images it brings in its wake — the \n dark facets of economy such as joblessness, decreasing disposable \n incomes and trickling foreign investment almost alter the very \n basics of consumerism. The economy is roiled with low gross domestic \n product (GDP) growth of 4.8 per cent, sharp depreciation of rupee, \n high inflation at around 10 per cent, merciless layoffs, less \n disposable income, rural slowdown and low consumer sentiment. \n Consumer spending fell to 1.6 per cent in the April-June first \n quarter of the current fiscal year, from 3.9 per cent in fiscal \n 2013 and an average of about 8 per cent in the five years to fiscal \n 2012, according to a report this month by property consultancy \n Jones Lang LaSalle (JLL). <\/p>\n
Arvind Singhal, CEO of Technopak, says, \u201cYes, the Indian \n economy definitely needs more private consumption in 2014. However, \n the reality will be another year of subdued consumerism on the \n back of high inflation and the overall economic scenario. Last \n quarter growth number was also not great. In the next one year, \n there is nothing that promises dramatic change.\u201d<\/p>\n
While retailers shut down stores, reduced number of categories, \n streamlined supply chain, FMCG and consumer durable players increased \n prices of their products, innovated, in an effort to become more \n efficient and attract elusive customers. Yet as the New Year tiptoes \n its presence, the retail experts and consultants are saying that \n the world would remain as \u2018chaotic\u2019 and \u2018depressed\u2019 \n with signs of subdued \u2018consumerism\u2019 in India looming \n high on the 2014 horizon.<\/p>\n
Retail experts say, while the upper middle class, that account \n for at least 40 per cent of all spending, will step up consumption \n in the next one year, the rest will choose to lie low for a while. \n \u201cI usually shop during the Christmas and New Year week, but \n this year, I find myself resisting any kind of purchases due to \n worries of home loan, rent, increasing cost of food and other \n sundry expenses. I don\u2019t see things changing to a great extent \n over the next one year,\u201d said Mark D\u2019Souza, a Mumbai-based \n 25-year old student of Psychology in Mumbai University.<\/p>\n
Govind Shrikhande, CEO of Shoppers Stop, says, \u201cGiven the \n current scenario, the consumerism scene for the next one year \n is not very optimistic. The uncertainty could persist over the \n next two-three years.\u201d He said they are interested in tie-ups \n with foreign partners looking at the Tata-Tesco deal.<\/p>\n
Santosh Desai, MD and CEO of Future Brands, part of Kishore Biyani\u2019s \n Future Group, believes that the situation is still quite volatile \n and turbulent at this point of time. “Hence, we are looking \n at the future with cautious optimism. We will definitely see an \n improvement in 2014 over last year, but its unlikely to be anything \n dramatic,\u201d he said.<\/p>\n
Even as mayhem strikes the consumer market, the election campaign \n is drumming up excitement. India\u2019s politicians are strategising \n new populist measures for the country. Both BJP and APP oppose \n FDI in retail. Analysts say a stable Narendra Modi-led BJP government \n could boost investor sentiment.<\/p>\n
\u201cPost election, the economy must see an upswing. While consumerism \n might not increase to a great extent, debit card usage will go \n up in the next one year, younger people will also cash in on purchases,\u201d \n said Alpana Parida, president of DY Works, one of India\u2019s \n leading brand design firms.<\/p>\n
Consultants say industry outlook is muted by political outlook \n and policy led economic issues such as inflation. \u201cConsumer \n spending is also governed by emotion. While some income segments \n are optimistic, some are not. All consumer players need to look \n at the way their businesses are done. There is enough potential \n for growth,\u201d said Devangshu Dutta, CEO of Third Eyesight, \n a Delhi-based specialist-consulting organisation for retail and \n consumer goods sector.<\/b><\/p>\n
Consumerism in India mainly started in the 1980s with the arrival \n of television sets in many households. After the economic liberalisation \n of 1991, consumerism took shape over the next two decades, on \n account of privatisation and the IT boom. The momentum increased \n manifold in the late \u201990 with a high degree of consumer awareness, \n aspirations and very high disposable income in the hands of the \n middle class. In the times we are in now, we can see a clear demand-supply \n mismatch. Whereas there is a very high level of aspiration, there \n are not enough resources available to support those.<\/p>\n
[ARTICLE CONTINUES BELOW]<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"
Financial Chronicle Mumbai, December 31, 2013 It\u2019s holiday season. The Oberoi Mall, in a far-flung western suburb of Mumbai, is decked for the occasion: golden bells are strung in the eaves; cotton floss circles the huge Christmas tree like vanilla ice cream. The well-lit stores in the mall are buzzing with jittery shoppers who are […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2977","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n