Diwali 2022: Prospects of the Apparel Industry

26 September 2022, Mumbai:

Retail businesses across India had a 15% growth in sales this August as compared to pre-pandemic levels as India has got its acts together, according to a survey by the Retailers Association of India (RAI).

'Diwali the Festival of lights' always lights up the apparel shopping mood and charges up. Retailers of apparel used broadly for gifting, and ethnic wear is merrily reporting steady demand in the run-up to the mother of festivity, typically which will culminate at the end of next month building the size of the opportunity.

Ringing in festivity cheer

The good news is Apparel/Clothing and lifestyle retailers have begun to witness demand tailwind and reported sound buying & consumer mood in the last week or two factoring in that we were in the middle of Shraadh/inauspicious period historically regarded as a low demand/buying time.

Not only that retail sector is looking at & expecting decadal high demand through the festivity which is already upon us kicking in with auspicious Navratri starting from today and delivering on demand.

As we speak many of the retailers whom we are been talking to have reported (YOY) year-on-year healthy & strong double-digit/teen numbers sales growth despite no/low discounting this season on the back of elevated business mood.

This too is reportedly supported by low channel inventories. The covid fear and anxiety receding also helped Diwali set in early this time only to match pre-pandemic levels but god willing to overshoot the targets in 1st normal year in last three years".

Macroeconomic Stability

What gives the legs to the market is as recently remarked by the Chief Economic Advisor (CEA), "The stagflationary risks in India is quite low compared to many economies despite of elevated oil prices, falling rupee, unfolding geopolitical concerns & hot red inflation in the part of the world. Making a point here that many central banks globally have unleashed steps to normalize monetary policies in the war against inflation".

The hard data points, Faster economic indicators as alluded by Revenue Secretary, Tarun Bajaj earlier that tax revenue collections in an ongoing fiscal year are expected to be far better than the budget reflecting the demand tailwinds, and timely policy interventions are giving a leg up to the businesses and spending consumers serve as a proxy for growth. 

Disclaimer: Currently the impending global near-recessionary trends eluding can be an unforeseen party popper/consumer Irrational exuberance leading to a blip in the process of economic recovery/revival.

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