A Dull Diwali Sets In

The Diwali season is upon us and it’s a critical time for many companies that rely on these months to give their sales that extra boost .For most firms this is the time when almost half their inventories are either sold or exported worldwide. It is the third quarter of the fiscal year that decides the fate of many companies which depend on the festival season commencing from Diwali. Considering the bleak forecast that was predicted for these companies following the lack of demand due to the economic crisis, their sales have surprisingly rebounded but only just.

It’s been a mixed bag of sorts for each sector of the Diwali industry. Some industries are doing well and are making profits while others are suffering from dwindling sales. Many industries are doing well in some parts of the country where their sales have shot up .The same industries are facing dwindling sales in other parts of the country. Therefore it’s been a case for both sides but considering the situation they were facing even a month ago, they’re pretty happy to take whatever they get.

The fireworks industry which makes seventy percent of its revenue during this time alone has adopted a high pricing strategy. Companies across the industry including market leaders Standard and Ayyan Fireworks have increased prices of crackers. They’ve cited the reason that the cost of explosive raw materials like Sulphur and Potassium have also gone up.

But the fireworks industry in itself has been experiencing troubles for the past two years. Sales were falling and combined with growing climate concerns, sales were hit but by increasing the prices of their products by around 20-30%, they have unexpectedly managed to bring in the profits which are no where near record levels but just enough to post growth.

Since this is an industry wide phenomenon, a single company is unlikely to lose out on its margins. Based on price the only ones who will benefit are local sweatshop cracker factories which sell their products on low prices alone but with the increasing crackdown on these factories by the government, they are not in a position to make a significant difference.

Clothes on the other hand have not had a big boost. Consumers are opting not to buy new clothes this season. It’s an understandable choice considering their own wallets have been hit pretty hard. Only women’s garments and clothes for children have been selling and not to the extent one may term as a huge success.

Sweets and eatables continue to do well .Powered largely by a growing domestic demand. Households are spending well on savories which has led to bakers and domestic suppliers doing well but they are expected to see a small decline in profits because big corporations which buy sweets at this time in large numbers to give to their employees have cut down on festival spending in an obvious move to control costs.

Gold on the other hand has just started to sell well. A few weeks ago when prices were higher, everyone seemed to forecast that gold jewelry sales in India would fall but since the prices have fallen people have started to buy. But it is too early to say if gold sales during Diwali have been successful.