Premium products drive Republic Day sales growth amid urban slowdown

Sales trends from the Republic Day weekend show that despite a slowdown affecting middle-class spending, demand for premium products continues to thrive. Retailers and durable goods companies reported a sales growth of 10-15% compared to the same period last year, driven mainly by high-end products such as large-capacity refrigerators, air conditioners, high-end televisions, washing machines, and smartphones priced above Rs. 30,000 (US$ 347.60). The fashion, lifestyle, and apparel sectors also witnessed YoY growth of 11-12%, driven by increased demand for winter and wedding attire. 

This growth comes despite fewer discounts this year, as the availability of winter wear was lower due to strong demand. Retailers had to adjust pricing strategies, emphasising easy financing options rather than offering deep discounts. For instance, the Director of Vijay Sales, Mr. Nilesh Gupta, highlighted the focus on affordable instalment plans and long-tenure payment options, enabling consumers to upgrade to products such as mobile phones, TVs, and home appliances. In the durable goods sector, Haier saw a substantial 30-35% growth in premium product sales compared to entry-level items. Premiumisation continues to be a key trend in the retail sector, with January sales performing better than December and premium goods outpacing mass-market products. Sales of makeup, home decor, furniture, and travel accessories also saw significant growth, with tier-I cities driving the demand for toys, baby products, and gaming accessories. At the same time, tier-II and tier-III towns favoured perfumes, deodorants, and health devices. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.