This Diwali will be good if not great, says industry
Industry observers note that while the global economy is facing a slowdown, the Indian festive market won’t face a significant setback due to the positive consumer sentiment
Advertisers are all set to up AdEx by almost 20% for this festive season quarter, industry observers have pretty unanimously noted. The demand in sales across categories has been significantly high considering this festive season comes after two years of the Covid-imposed lull.
However, the economic situation globally has not been very encouraging with financial watchdogs and international bodies like the IMF throwing in words of caution about an impending global recession.
So, has this dampened the domestic festive season? We asked industry leaders. While most said that it was going great as expected, others feared the global downturn, the ongoing Russia-Ukraine conflict and rising fuel prices may have an impact on festive spending. This Diwali will be good if not great, industry experts said.
Talking about the impact of inflation and slowdown on the growth of Indian AdEx at the recently-held e4m Confluence, GroupM South Asia CEO, Prasanth Kumar, shared that there was inflationary pressure on the economy. While some categories have been spending, others have changed their strategy.
“All these challenges also give you an opportunity to think much harder about how you can find solutions to this. My bets are still on India and I think we have a fantastic opportunity. We have adapted to newer ways of looking at things. The entire marketing aspect and looking at solutions for businesses took off. A lot of patience and resilience is required to understand each of the momentums. Maybe there are impacts of different seasons and quarters which could be changing. Those are the aspects that we need to think of,” Kumar noted.
The industry does seem to have taken up the challenge well as we have been seeing a significant number of new ad campaigns and product releases across categories since the beginning of the festive period.
Throwing in a word of caution, Jai Lala, CEO of Zenith India, says: “Even though India is doing very well, there will be some impact.”
Apart from the economic slump, Lala said the second challenge was the fact that venture capitalist were holding back on funding. I am not saying Diwali will be a slowdown but it probably won't be a great one.”
Dispelling all signs of worry, Dinesh Singh Rathod, CEO of Madison Media Omega, said the festive season will be great for the industry. The only difference he identified between this year and the years before was that traditional advertisers were far more prevalent than new-age clients.
“It's not like that new age clients are completely off but they are not investing with the same intensity as they used to do before. Everyone is looking at sustainability and profitability and I guess given that they are not in the investment mode they have cut down their spending and hence you won't see much of these categories.”
When discussing the effects of the global downturn on the festive season, he recalled that even in 2008, right after the Lehman Brothers crisis hit, India's festive season did not see a decline. “Indian tradition and festivals are all about buying new stuff so brands definitely want to get a share of the wallet and therefore they will be creating awareness and communicating with the consumers.”
Stating similar thoughts, Innocean Worldwide Communications, Group Director, Sridhar Balasubramanian shared that the festive season looks great for the industry. He shared, “If you see the newspapers, it kind of reminds you of the 2019 scenario. In fact, TV or any other media is flooded. Even some of our brands are facing inventory and page position availability issues at this time. These situations indicate that it's going to be a great festive period,” he shared.
As for Mansi Datta, Chief Client Officer, North and East, Wavemaker India, “Several shocks have hit the world economy already weakened by the pandemic: higher-than-expected inflation worldwide––especially in the United States and major European economies, slowdown in China, reflecting COVID- 19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine."
However, she noted: "This festive season is expecting the quintessential spenders like FMCG, Consumer Durables and Fintech categories to fire. But some of the categories that were previously big spenders like auto, edtech see a gloomier forecast because of macro conditions."
Prasanth Kumar too said during e4m Confluence that there were newer categories coming in. “We never thought that there would be FinTech or AdTech, which are contributing so much from an advertising perspective.”
“Finding an opportunity within a challenge is an interesting problem to solve and we are finding these opportunities in a span of every two months. The growth is there and it is constant. There is consistency in the growth story and I think the bet is still on India because we are a very large consuming market. There is room for many more things to be tried not just in different categories but even in media and marketing. I think that will be true for many more years to come. The 2020-30 decade is an interesting one to watch out for,” Kumar noted.
