Retailers To Log Growth Of 10-12%, E-Commerce Firms To See 28% Surge In Sales In Festive Season: Wright Research

This growth is expected to be led by the automotive, FMCG, e-commerce, manufacturing, commodities, travel, and hospitality sectors and employment is expected to increase by 20 per cent in the season. 

Retailers expect 10-12 per cent growth in sales during the festive season this year on account of an upward projection in consumer sentiment, a report by Wright Research said. According to the study, this growth is estimated to be led by the automotive, FMCG, e-commerce, manufacturing, commodities, travel, and hospitality sectors in the ongoing festive season. The study further stated that employment is expected to increase by 20 per cent in the season. 

Detailing the boom in the festive season, the report noted, “The onset of the season starting with Ganesh Chaturthi followed by Navratri, Diwali and beyond – contributes as a major economic catalyst in the country. Auspicious buying, marketing and discounts, deferred purchases are a combination of festive euphoria and tempting deals that sparks consumer spending during festival months,” as reported by the Financial Express. The report also noted that e-commerce firms are expected to report a 28 per cent increase in sales during the period.

The festive quarter is expected to be strong on account of positive economic factors, businesses adapting well to market changes, and appropriate intervention by the government to check inflation. Additionally, the quarter also has the potential to generate a ripple effect of growth and employment opportunities in the future, the report noted. 

Wright Research’s founder, Sonam Srivastava, said, “We also see our smallcases making a tilt towards the festive stocks as the momentum picks up. The Innovation and New India portfolios bet on India’s economic revival with a focus on domestic manufacturing, automobiles, and e-commerce sectors, and the Momentum and Alpha small cases are bound to pick up the trending festive stocks as the momentum builds. Festivals are a Mahurat for good fortunes in the Indian stock markets and our portfolios are geared up to take advantage.”

The festive season also enhances India’s GDP during the quarter, as major festivals contribute to nearly 40 per cent in annual sales for some companies in certain industries such as home decor, apparel, electronics, confectionary goods, etc. 

The study by Wright Research also found that manufacturing and industrial sectors have logged a massive increase of 245 per cent in hiring on a year-on-year (YoY) basis. Other sectors like BFSI and telecom have also seen a surge in hiring. Further, the demand for retail staff has increased by 9 per cent, the report stated. As the workforce in the e-commerce segment touches the 3 lakh figure across warehouse and delivery sectors, this represents a boom in online shopping and logistics, especially in light of the festive season, the study underlined. 

Srivastava added, “Festivals play a pivotal role in stimulating economic activities, reflecting deeply in India’s GDP growth. The festive season, particularly Durga Puja and Diwali, traditionally spurs heightened consumption and investment, contributing up to 40 per cent for annual sales in sectors like home decor, apparel, electronics, and confectionary goods to name a few,”. 

This growth was clearly visible as the domestic passenger vehicles posted an increase in August sales by 10.4 per cent on a YoY basis. As such, automobile manufacturers reported an uptick in production for the season by 10 to 20 per cent against last year’s production estimates. The consumer electronics and FMCG industries logged an increase of 25 to 30 per cent in sales on a YoY basis during the 2023 Independence Day sales.