Our guest author Subhas Warrier says most economic indicators for India are showing an upbeat picture.
When it rains, it really pours! It is believed that this works for good tidings but, as is evident, the reverse is equally applicable.
To draw parallels this festive season and see if we have actually reset the new normal, we need to look at change as continuous.
Festival sales of all categories, in general, should be on an uptick, if we have had a good monsoon. But the good monsoon is relative and not just about a good kharif harvest, right?
In Kerala, the weather bell for festivities has struck and, just like the advent of the timely monsoon, the state also heralds the consumer appetite for shopping, as we welcome Onam. But the same monsoon is not relenting and continues to play spoilsport.
As the late Rakesh Jhunjhunwala (RJ), in one of his candid quotes, said, people spend when they are positively disposed about what the future holds for them, and we all know the gung-ho of RJ.
On the face of it, most economic indicators for India are showing an upbeat picture, but depending on who is painting the picture, the views could differ.
The latest CMIE tracker on Consumer Sentiments Index, draws a see-saw movement, but is seen peaking at the right juncture, as we move into the first week of September, just prior to the festive season.
Similarly, the unemployment rate is down to 7.53%, after hovering just under 10% at the beginning of August. There is one more metric called Consumer Expectation Index and as a result of the erratic monsoon this year, it is seen to be weighing down the sentiments from the hinterland.
Even though headwinds from global situations loom large, there are always positive cues that we can pick up here at home.
The auto parts turnover peaking in FY22, highest-ever, export growth rate at 43.5%. At the same time, the unusual high demand and price escalation of the second-hand car market is the upside of the global chip shortage crisis witnessed in the auto sector, causing delay in the delivery of new vehicles.
Another case in point is the Pradhan Mantri Jan Dhan Yojana deposits reaching a record level of close to Rs 2 trillion, as of August 22. ‘Banking the unbanked’ was a well-thought-out mission, because the average deposits per account have constantly risen. They are now reported to be Rs 3,761, as of August, an increase of 10.6%, as compared to the same period last year. This is a clear indication of the inculcation of savings habits amongst people.
There are many takeaway(s) on both sides of the spectrum and, perhaps, is the case of the glass seen as half full or half empty? Hence, people have become cautiously optimistic. They have become choosier. Not frugal, but taking lessons from the COVID pandemic and the ongoing uncertain global situation, the mantra would be ‘save now, spend later’.
If real estate price is an indicator of investor appetite for the long-term, advertising uptick means the short-term effect is showing a rebound and the forecasts so far are all in double-digit growth.
The underlying reasons are many, but here are some perspectives on the continuous change I mentioned at the outset. It is about the changing media landscape and consumer behaviour.
Blockbuster releases with the advent of festivals, give an early heads-up on what is in store for the rest of the season. According to industry reports, July-August continued to remain challenging, due to big ticket flops. But it is also true that OTT platforms have changed the way people decide on the choice of going out for a movie, or sitting at home and binge-watching.
The number of OTT platforms have increased from two in 2012 to 40 today. Monthly active users have touched closer to 700 million. Published reports have indicated that 80% of the share of this is from rural and Tier-II and III towns.
The K-Drama phenomenon and the binge-watching effect have set a new normal in entertainment habits. One upside we could argue is that family TV time is now back and is, perhaps, taking back social media time in a reversal of trends.
Going by some reports, Bollywood is breaking down. It is running out of ideas, because it seems to be producing just remakes, borrowing from Hollywood and making badly dubbed movies from South India. People’s escapism route is now in their own living room, rather than the movie theatres.
But didn’t someone sing the song ‘video killed the radio star’ in the 1980s, and we saw radio emerging as a complementing companion much more strongly in the later years?
As for the festive season, let us see if the big Bollywood lineup throws a surprise. We can still hope the people come back in droves, because there is nothing like the 70 mm screen with the surround sound effect of epic proportion.
So, if cinema occupancy picks up this festive season, then the hope and instinct can change the short-term view to ‘spend now’ - prudently though!
Will wait to see if Onam will take the festive fervour up northwards in every sense of it!
Happy festive season.
(Subhas Warrier is director, Sensibly Weird Company.)