As downturn hits home, India Inc is cutting down on gifts
Amid a weak economy that has been swayed by the global financial turmoil, corporates have also chosen to stay away from wasteful expenditure and are planning to significantly cut down on corporate gifting this season, reports Ruchi Hajela.business Updated: Oct 12, 2008 21:34 IST
Amid a weak economy that has been swayed by the global financial turmoil, corporates have also chosen to stay away from wasteful expenditure and are planning to significantly cut down on corporate gifting this season.
Lavish gifting as a part of corporate relationship building could see a downturn this season as companies cut corners to reduce costs.
While some corporate houses say they have chosen to go slow this festive season, others are looking to bring down their corporate budget to near negligible.
From Svarovski crystals to expensive Scotch whiskies to made to order Swiss chocolates would not be the order of the day this season.
Instead, the good old mithai that is not so expensive is all set to make a come back, market observers feel.
“High value products are a big no no. Our clients are now looking at simple but effective means to reach out to their clients. The list of recipients has also been pruned
significantly,” a private consultant specialising in corporate gifting told Hindustan Times.
State-owned carrier, Air India always known for its lavish gifting has decided to bring down its gifting budget from Rs 25 lakhs to “near negligible”. “Slowdown in the industry coupled with losses has forced the entire industry to rethink how they spend. Every rupee saved today is every rupee earned,” an Air India official said.
However, companies like Archies that are into gift manufacturing business, which did business of Rs 3 crore in the last festive season, expects its business to double this year.
“We do not cater to the bulk gifting segment but are targeting exclusive range of gifts that companies give to their key employees or customers and I don’t think this category will be affected,” said Pramod Arora, joint managing director, Archies Limited.
Archies is tying up with pharmaceutical and beverage companies to cater to their gifting needs, he said.
Private carrier Jet Airways is also looking to cut down its corporate gifting budget. “There will be a substantial cut in our budget but cant give you the exact figures,” a Jet Airways spokesperson said.
A Reliance Communication official also echoes similar sentiments. “We are redoing our list of recipients, this will help us bring down cost,” he said.
Consumer durable giant Samsung said they were never into corporate gifting while LG Electronics has changed its strategy for corporate gifting last year.
Genesis Colors that owns designer labels such as Satya Paul is expecting revenue generated through gifting on Diwali by at least three times of what it times last year. “Last year, we did a business of around Rs 7 crore from corporate gifting and we expect the same to multiply by at least three times,” said Jyoti Narula, managing director, Genesis Colors.