<em>Diwali</em> gloom: Market down by 40 percent

New Delhi: It's that time of the year again, when vendors announce exciting offers, and new products are launched to herald the arrival of Diwali. But this year much of the excitement and hoopla surrounding this festive season has been doused owing to the current economic situation. Leading sub-distis in the region claim that this year's sales have gone down by up to 40 percent. While the fourth quarter has traditionally been one which partners have looked forward to, this year the grim situation brought no cheer from this front.

Not only has the fluctuating dollar adversely impacted the IT business, the channel feel that the recent trail of bombs and bomb-scares have got people avoiding the usual shopping sprees during this time.

North

Partners in North marked a stark difference in sales as compared to last year. Harish Puri, CEO of Computer Empire, New Delhi shared, “This time the market has been very slow and there is no excitement as such for Diwali. The reason is not only the global financial crisis but also the terror incidents that have happened in our country, which have affected the movement of customers in markets during Diwali. Therefore, the market is not happening enough to excite customers and retailers. The market has been sluggish for the last one and a half months. Since the volume of the business is still ok, we are witnessing a 20-25 percent YoY growth."

Pointing out this year customers were preferring to buy either consumer goods or jewelry rather than IT products, Ajaya Kumar of Park Computers, New Delhi said, “Instead of IT market, more rush is visible in the gold, silver and white goods market. For the last 10 years, our YoY growth has been more that 20 percent. The market is slow in this quarter, but we are maintaining out performance."

Like other market across the country, Rohit Kohli of Comexcell Technologies, Kanpur lamented that the Kanpur market is also slow, and there is no excitement among customers. This is also owing to the shortage of money. Therefore, the market this Diwali has been very weak in comparison to previous ones. I have never observed such a silent Diwali. Though our YoY growth is 50 percent but around Diwali season, it has slowed down.”

Reminiscing the sales during last year's Diwali, Manish Mehrotra of Allahabad-based Tritech Enterprises said, “Diwali this year does not seem to be as exciting as it was earlier. Last year only, we had done amazing business but this year sales have dropped by 40 percent. It does not seem to be a festival season and the market is so slow. I have never seen such a dull Diwali in the last 42 years. We are just hoping that the economy improves and the flow of finance resumes.”

Another issue partners are facing during this period is that of rising stocks. Prafula Somani of Jwala Distributors, Varanasi pointed out that vendors do the billing to the partners and here there is no space to move the products. “The stock is rising but the customers are not buying anything. In fact, not much queries are also coming from buyers. It is disappointing to see the market is such a condition,”he commented.

South

The overall sluggish economy prevailing across the globe, cautious spending by customers, cost cutting efforts from enterprises are a few reasons partners attribute to the dull sales this season. “We are witnessing dull sales for the past one month. Business hasn't been that good and there is no enthusiasm over Diwali here,”claimed Yasapal Jain of Devraj Computers, Chennai.

Rakesh Jain of Supreme Computers informed that for the last three months the market has been witnessing a slow period. “Compared to last Diwali, this year sales has been really dull. We are keeping our fingers crossed,”he said. He added that it would take some time to estimate the total amount of business for this season. “But I am sure that it will be a dull period for the overall channel industry,”Rakesh Jain claimed.

Retailers in the region are also of the same sentiment. According to K Gopinath of Modern Computers, sales have been very normal during this Diwali season. “We need to wait for another few days to see whether the sale will picking up, as at this point we can't rule out the possibility of sales completely,”he shared.

The rains in Chennai have also added to the agony of dealers. “Heavy rain in Chennai is also another factor, which is slowing down business to a greater extent. Normally people don't buy during the rainy season,”he added.

According to Vinod Jain of Computer Planet, Chennai, cautious spending by customers and a decrease in the investments in the corporate sector has impacted the growth of the company. “We haven't seen any dip in the sales percentage, but there has been no growth either. Despite several offers in projectors and laptops, we don't see any huge amount of business due to the customers exercising caution during this time,”Jain informed.

“The overall market is average and it is not as per the expectation for the IT industry,”said Sanath Babu of Sri Durga Computech, Bengaluru. “The Pujas were good for us, but still we expect Diwali to do even better. Buying has been more need-driven. This year we saw a 40 percent dip in sales as compared to last year,”he added.

For Tejinder Singh of Access Computers, Chennai, this is the worst time that he has seen in the market. “There is virtually no sale happening in the retail showrooms. It is the worst situation I have ever seen in the market ever in my career,”Singh claimed. He also blame the weather for playing spoilsport. “The usual business that used to happen is not happening due to this bad weather in Chennai. Every year it rains but this year it has rained more than normal,”said the dejected retailer.

Sub-distis in the upcountry regions in Tamil Nadu too are feeling that the Diwali craze is missing among customers. R Mahesh of Ozone Computers shared, “We are feeling the pinch, as the sale is not happening. On the other hand, even if the sales are happening there are some financial defaults,”Mahesh informed.

But dealers in Hyderabad showed mixed response to sales during this period. According to Ahmed Ali of Compaq World, business has been quite good for this season. “We have sold almost 470 plus laptops and desktops this month alone,”claimed Ali.

But, for Daulat Jethani, Managing Partner, Compage Data Products, the overall sluggish scenario exists in Andhra Pradesh too. “When there is going to be an overall slowdown, it is obviously going to be here too. There is no enthusiasm in the Hyderabad market this Diwali, as sales aren't happening. Frankly speaking there is just 50 percent of sales happening in the overall market,”Jethani informed.

Agreeing with Jethani, Ali Mohammed Khan, Sales Head, Shewtha Computers and Peripherals, Hyderabad said, “For the past three months we are facing this situation. We have lost almost 30-40 percent of the business that used to happen on a regular basis. Even the Diwali offers and schemes by vendors have not attracted customers.”

West

Lamenting the poor sales during the period, Anees Khalfay of Radiant Technologies, Mumbai said, “The market is running very slow and sales are not happening in the market. We are not getting any requirements from corporate segment during this period. But this can be attributed to fact that the recession in the market.”

Ashwin Kukreja of Mumbai-based Real Time Computers shared that while sales were low, even in the cases where they were making sales, most customers were opting for EMIs instead of giving down payments. This has been increasing the issue of liquidity of cash. “While sales in retails is low, the channels have been hit to a greater extent. In retail the customers who are buying products are middle and lower middle class people and they are not making down payment. But we feel that the situation will not continue like this. IT products play a crucial role in every one's life. So after some time the IT market will come up,”said Kukreja optimistically.

Every year partners enjoy good sales during the festive season, especially after Dashera, which is when the actual purchasing starts. Talking about this issue, Talkin Zamindar of
Media Infocom, Ankleshwar and Baruch attributed the dip in business to issues in the region. “This time the market is has gone down by 40 percent low and according to me it has nothing to do with Diwali. In Ankleshwar and Baruch there are two major reasons for low sales in IT products. One is the recession that's going on across the country. Customers have adopted precautionary methods by not buying any IT products at present. Footfall has come down to 30 percent. 30 to 40 percent of customers ask for EMI or installments. The second reason is that in our region we had a tie-up with Bajaj Company for offering support on IT products, but now because of the financial losses they have incurred, they are recovering their money and will close the office in Ankleshwar and Baruch region.”

East

This year has proved to be rather bad for the East region. While first it was the wrath of the Kosi river that cornered off the region, later it was the issues boiling up in Singur, not to mention, the on and off bundhs that are now a common occurrence there.

According to Naveen Gupta of Patna-based Krishna Agency, Bihar is one state in the region, which sees many a students coming to study. The main customers are the non-residential students of the state who return on the eve of Diwali and Chhat Puja. With the cancellation of trains in Bihar, the students have not been able to return to Bihar. So retail has suffered a huge setback due to this situation.

“IT retail has been hit hard by the global slowdown. With the increase in hardware prices, sales have gone down considerably. Even then, sales have been constant but not as high as we had expected before. Although a considerable transaction is going on in the market at present, it is a bit lower than what it was in the previous year. However, we are optimistic that in the week of Diwali sales will see an upward trend,”commented Pawan Jajodia of Mohit Electronics, Kolkata

In Bhubaneswar, Anil K Chowdhury of Maple Computers was upbeat about the retail situation in the state. “Orissa is seeing a boom in terms of IT retail with the government taking more initiatives than ever before to boost the IT infrastructure in the state. As e-governance projects are becoming a big hit in the state, the government is relying on local supply of computers from the dealers in the state. This has given a major boost to the retail scenario in the state. This year, retail sales are at an all-time high with major sales concentrated in Bhubaneswar and Cuttack. Also, the performance of the upcountry has been consistent. We are expecting a huge boom in the coming week,”said Chowdhury.
While the general feeling in the IT market has been low, partners are optimistic that the scenario would get better in the next two or three months time.