Premium products drive Republic Day sales growth amid urban slowdown

Sales trends from the Republic Day weekend indicate that consumers continue to favour premium products over entry-level goods, even amid an urban slowdown impacting middle-class spending. Given the sale of high-end products, premium and affluent consumers appear to remain relatively unaffected.

 

Retailers and durable goods companies report that sales during the Republic Day weekend grew by approximately 10-15 per cent compared to the same period last year, according to a report in The Financial Express. This growth was primarily driven by premium categories, including large-capacity refrigerators, air conditioners, high-end televisions, front-load and top-load washing machines, and smartphones priced above Rs 30,000. In the fashion, lifestyle, and apparel sectors, year-on-year sales growth is expected to be around 11-12 per cent, led by demand for winter and wedding attire, according to industry executives.

   

This growth was witnessed even though discounts offered this year were not as steep as those offered last year. The lower discounts were due to strong demand for winter wear, resulting in lower stock levels available for sale. It is also worth mentioning that the retail sector faced challenges last year due to weak demand.

 

Premium durables drive Republic Day sales

 

“The trend of premiumisation has continued into the new year, with January showing better performance than December. It’s a K-shaped recovery, as premium durable goods are experiencing higher growth compared to mass-market products during the Republic Day weekend,” said NS Satish, president of Haier Appliances India.

 

While the durables industry is experiencing overall sales growth of 10-15 per cent year-on-year this Republic Day, Satish said Haier has seen a more substantial 30-35 per cent growth in premium product sales compared to entry-level items. The company focused on increasing the in-store visibility of premium products and offered promotions to encourage consumers to upgrade to feature-rich options.  According to Unicommerce, products that attracted higher demand and recorded significant growth included -- makeup products, home decor & furniture items and travel accessories. "While tier-1 and metropolitan cities led growth across toys & baby products and gaming accessories, tier-2 and tier-3 towns saw higher demand for perfumes & deodorants, and health devices.," it added.

 

Republic Day sale: Focus on easy financing, not discounts 

Retailers and brands alike offered discounts and financing schemes during the Republic Day period, but the emphasis was on affordability through easy financing rather than heavy discounts.

 

Nilesh Gupta, director of Vijay Sales, a leading consumer durables retailer, commented, “Discounts on electronics and home appliances are around 40-50 per cent, but our focus is on making products accessible through easy installments, long-tenure payment plans, and zero-cost financing. This approach encourages consumers to upgrade in categories such as mobile phones, TVs, and home appliances.”

 

In the apparel sector, discounts during Republic Day and January were reportedly 7-8 per cent lower than last year, as brands faced less urgency to clear inventory. Manish Kapoor, managing director and CEO of Pepe Jeans, stated that sales growth in this segment is expected to remain in double digits due to better price realisations.

 

Wedding season fuels premium wear growth

 

“The wedding and winter wear categories are performing well this year, reducing the need for aggressive discounting. Since mid-December, when the wedding season began, sales growth has been evident, with a 9-10 per cent increase in December 2024 compared to the previous year. For January 2025, including the Republic Day weekend, sales growth is projected at around 11-12 per cent year-on-year,” Kapoor told The Financial Express.

 

Similarly, Shoppers Stop managing director and CEO Kavindra Mishra reported improved demand during the first two weeks of January, driven by the wedding season. Sales growth in January outpaced both November and December.

 

“Premium categories now contribute 64 per cent of total revenue, up from 55 per cent previously, and we aim to sustain this trajectory through January, February, and March 2025,” Mishra said.

 

Initiatives such as ‘India Weds with Shoppers Stop’, ‘Winter Magic’, and ‘ShowStoppers’, which launched in the December quarter, have continued into January and through the Republic Day weekend. Shoppers Stop is targeting a 10-11 per cent growth in premium wear sales during the March quarter, industry experts noted.