Consumers may have to pay more in 2008
As India Inc braces for 2008, Indian consumers would have to prepare themselves to shell out more for apparel, reports Saurabh Turakhia.business Updated: Jan 01, 2008 01:01 IST
As India Inc braces for 2008, Indian consumers would have to prepare themselves to shell out more for apparel, come to terms with higher ticket prices at multiplexes and products like LCDs, which have seen a price erosion in the past few years, could also become expensive going ahead.
Malls might also look at differentiating themselves from the competition and escalating real estate costs would force some take a close look at the ground reality.
Vivek Sharma, vice president (marketing and sales), Onida, said: “The contribution of organised retail (Croma, Electronics Bazaar, Vijay Sales) to the sale of electronics is definitely going to go up from existing levels of 8-10 per cent of sales to over 15 per cent. We may also see the emergence of high-end boutique electronic brands like JBL, Harmon Kardon and so on.”
As far as apparel is concerned, it is very likely that consumers would have to pay more.
Shreyas Joshi, president of Raymond Apparel that introduced its women’s wear brands in 2007, said, “Apparel products will see a 5-10 per cent increase in average prices across all categories. This is because the fabric used for these products is getting costlier.”
Another trend that is going to emerge strongly is that of marketing centred on children. Samir Patil, CEO of ACK Media, said, “More and more marketing activities will be centered around kids as reports point to them becoming big influencers in many purchase decisions. More products will also be dished out for the kids. For example, Microsoft and Intel are working on an initiative centered around kids to promote PCs. Indian kids brands would also have to match the quality standards of international products like Spiderman and Shrek.”
In the consumer durables space, the inclination towards high-end and premium products will grow. V. Ramachandran, director- sales, LG Electronics, said, “Consumer durables are increasingly becoming lifestyle products. Consumers are going beyond the functional benefits while purchasing them.”
He said a refrigerator with a LCD screen on is designed for the working woman so that she doesn’t miss out on her TV fare while cooking. This is priced at Rs 2,20,000. Similarly, high-end mobile phones will increase in popularity, he said. The contribution of specialty chains like Croma, eZone, Giriyas would also go up from 10 per cent to 14 per cent for LG, he added.
The consumer’s cine-going experience is also set to burn a bigger hole in their wallets. Chances are that the consumer may have to shell out more money for the multiplex experience. Speaking to Hindustan Times, Rasesh Kanakia, chairman of Cinemax, said, “The production costs are rising and hence the ticket prices will have to reflect this hike. On an average, ticket prices may see a hike of 5-7 per cent.”
The process of conversion of single screen theatres into plain vanilla talkies by multiplex chains would continue. Damodar Mall, CEO, innovation and incubation, Future Group, thinks that the year will see malls differentiating themselves from one another. He said that the contribution of private label brands would rise, in some categories like fashion to as high as 90 per cent. Consumer brands like Marico, Nestle, Amul will keep playing the health and wellness strategy with pro-biotic products for instance.