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NEW DELHI : Consumer-facing companies expect demand for discretionary categories such as apparel, jewellery, and travel, to bounce back this festive season on positive sentiments surrounding India’s economic prospects.

The December quarter accounts for 30-40% of sales for the year for brands in India as shoppers tend to splurge on clothes, electronics, large appliances and gifts, besides upgrading their household furnishings and buying gold during the festive months. “Compared to last year’s gloom and virtual celebrations, this year the mood is more festive and celebratory, and consumers are likely to loosen their purse strings more," said Amit Adarkar, chief executive officer of research firm Ipsos India.

With the gradual easing of mobility restrictions, and the opening up of malls, multiplexes, schools, offices and leisure travel, consumers are willing to spend more on formal wear, travel wear, and personal grooming, which saw muted sales last year, Adarkar said.

Primary Consumer Sentiment Index (PCSI), according to Ipsos India, has been steadily climbing for the last five months and is up nearly 9 points compared to the year-ago period.

Consumers are willing to spend on clothing after being cooped up at home for a long time, said Sidhant Keshwani, managing director of ethic apparel retailer Libas. “There is a need for fresher trends as people were wearing casual clothes throughout the pandemic. This would also be the first time in one-and-a-half years when people look to get back to the festive mood and venture out. So they would look at newer and more comfortable silhouettes," he said.

Apparel retailer Levi’s said consumers are upgrading their wardrobes. “We are going towards one of the strongest Diwali in many years," Sanjeev Mohanty, senior vice president and managing director, South Asia, Middle East and Africa, Levi’s, said in an interview. “The mood has shifted towards more consumption… Consumers want to… dip into new innovations," he said.

Retailers across the board reported a strong recovery, with sales in September reaching 96% of pre-pandemic levels, according to the sales data released by the Retailers Association of India (RAI) on Wednesday.

The strong rebound across categories hint at a “turnaround" for the retail sector this festive season, said Kumar Rajagopalan, chief executive, RAI.

Shoppers are less anxious with the vaccination drive picking up pace in India and covid infections on a decline, said Porus Doctor, partner and consumer industry leader, Deloitte Touche Tohmatsu India LLP. Most retailers will reach pre-pandemic sales, he said.

Consumers are expected to splurge on discretionary items during Dussehra and Diwali, followed by the wedding season through to Christmas and New Year, according to Doctor. “Apparel, particularly ethnic and festive wear, accessories, consumer electronics including mobile phones, and household appliances are expected to witness strong growth during this festive season," Doctor said.

Online sales will play an increasingly important role as customers take to e-commerce in a big way, he said.

E-commerce majors such as Amazon and Flipkart, which held their flagship festive sales earlier in October, recorded transactions of $2.7 billion in the first four days, Mint had reported.

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