International garments and accessories brands are expecting a 30% surge in sales during this festive season. Experts say that India has become the most "happening" place for foreign brands.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said that ad spends in TV and press will be up by 45% during 2011 compared to festive 2010. This will surge sales by 30-40% for foreign brands that offer home and electronic appliances, automobiles, textiles, gems and jewellery, luxury products and home essentials.
"During this festive season, especially Diwali, foreign brands are expected to register almost 30-40% of their yearly sales. Most of the international brands operate at a gross margin of 60%. Tommy Hilfiger, Marks and Spencer, Levis are some brands that have opened Indian offices which has paved a growth path for international brands. Close to 20 million people are buying products from foreign brands at the premium they offer," said Purnendu Kumar, retail analyst with Technopak, a consulting firm.
International players are happy with the way sales have increased since the last week of September.
"Diwali sales this time has picked up after the traditional shraddh period from 28 September. The one month period will contribute in excess of 10% of the year's revenue for the second quarter. Profits double for our retail segment for this period which account for more than the year's average profits," said Sooraj Bhatt brand head of Allen Solly India.
"Consumers splurge during festival season and retail growth will be one of the best during Diwali. Louis Philippe expects a minimum 12-14% of overall sales to come during this Diwali. Profits during this season will be the best as sales will come from full price merchandise," said Jacob John brand head Louis Philippe India.
"Considering it is the festive season and people indulge in exchanging gifts or buying new items for themselves, sales are bound to spurt. We expect 25% of annual sales during Diwali season for Police watches," said Haresh Chainani, managing director, Ganga Watches, which has a franchise of Police in India.
Even online portals say that International brands are attracting more people. "We have a 50-50 profit ratio for foreign and ethnic brands. We provide foreign brands which are not easily available in stores. This helps in building a strong customer base. However, during Diwali we see a surge in sales for home essentials and decor," said Trivikram Thakore, head marketing, Fashion and You, a luxury fashion portal and Deals and You.
16 October 2011 in The Sunday Guardian.
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