As the Coronavirus outbreak continues to spook international trade, it is likely to dampen Holi celebrations as prices of sprinklers and water guns are expected to rise by up to 20 per cent because of lack of supply from China. According to the industry, India imports 90 per cent of Holi related water toys from China.
While large distributors had already placed their orders in advance in November, much before the virus outbreak, it is the small traders whose sales would suffer more. “Manufacturers are planning to increase the price of products by 15-20 per cent as demand is more than supply. Small traders will stick to selling last year stock to insulate themselves from losses,” said Sandip Chhettri, chief operating officer of TradeIndia.com, an online B2B portal for small businesses based in India.
Chhettri said the portal has seen a 127 per cent increase in enquiries related to Holi products from small scale traders since December as they scramble for stock. The demand for organic colours has also seen an uptick of about 23 per cent, especially from Metro cities.
Several players are also waiting for their consignments to be released which have already reached India. “Our consignments for which we placed orders in November have already reached India, what is taking time is the release of stock. However, our sales will not be hurt for 3-4 months if everything goes well,” said Anil Kabra of ABK corporation, a Mumbai-based toys distributor
According to global market research firm IMARC, the domestic toys market is pegged at $1.5 billion which is market is further projected to reach a value of $3.3 billion by 2024, growing at a CAGR of 13.3 per cent during 2019-2024. Of the total toys sold in India, about 85 per cent is imported with China being the top source, followed by Sri Lanka, Malaysia, Germany, and Hong Kong.
Earlier there was also a fake social media message doing the rounds to boycott buying made in China Holi products by the government of India which has taken a beating on the shopping spirit of consumers. However, it was later clarified that no such advisory has been issued.
Experts say supply of goods and raw material will continue to take a hit for retailers even as the number of new cases see a decline in China. “Overall domestic demand is lukewarm and consumer spend is cautious. However, businesses are working on alternative sourcing strategies which will hopefully boost demand,” said Vishnu Gullipalli, founder of Retail Insights.