It’s perfectly fine if you don’t have time to read this column, busy as you may be getting that best deal out of the shopping festivals run by e-commerce sites. It is not just the Flipkarts and Amazons that are hoping you will shop till you drop, but the entire economy. You see, the economy banks on festivals to boost its GDP numbers.
As we enter the official festival season of the year, the conditions are conducive to increased spending, despite skirmishes on the border. Flipkart earned ₹1,400 crore on the first of its Billion Days, the highest sales it has recorded in a day.
The new RBI Governor, Urjit Patel, has sweetened the deal by lowering interest rates, and companies in auto and FMCG sectors are salivating over the speed at which cash registers will roll this month. Auto sales were already up 21 per cent in September, compared with last year.
Diwali stimulus
Diwali, which the country will celebrate later this month, is unquestionably the biggest shopping stimulus. Right from the neighbourhood mithaiwala and grocery store to white goods and gold retailers, everyone cashes in on the celebratory mood.
Companies from sectors such as auto, FMCG and white goods generate up to 35 per cent of their annual sales during Diwali and the remaining part of the festival season. It helps that almost all of them come out with new models and products to lure the buyer.
That is why it helps that India is a multi-cultural country. We get the maximum number of public holidays a year globally, and it ensures that all through the year, our GDP keeps getting boosters.
None might compete with the grandeur of Diwali, but other festivals too pass out with impressive numbers. Ganesh Chaturthi, which just went by, might not be as widely celebrated as Diwali, but still managed to provide a ₹25,000 crore-push to the economy. In Mumbai, just one Ganesh idol was insured for ₹300 crore.
Down south, Pongal and Onam are the biggest shopping seasons in Tamil Nadu and Kerala. And Dussehra has a similar impact in West Bengal.
Impact on economy
Internationally, Christmas is one long shopping season. In the US, about a million additional hires are done across sectors to handle the holiday rush. In 2013, Americans spent more than $800 billion on gifts and over a billion dollars on Christmas trees. Retail sales breached the $3 trillion-mark. Valentine’s Day is probably the only other ‘festival’ that generates huge sales in the US.
Scores of studies have analysed the impact festivals have on economies. Most of them underline the healthy returns that the celebrations generate. In the US, many states and cities have local festivals to boost their economies. Many of these special events centre on arts and music. Though most are partly sponsored by tax money, in the final analysis, the returns outweigh the investments.
Fortunately for us in India, the busy festival calendar makes sure we have many reasons to celebrate, and spend.