Gift season getting back on feet with Diwali
The gift season is back with Diwali only three weeks away. A top executive of Archies said Indians love to gift teddy bears and mugs the most. They spend most of their time on Valentine's Day, followed by Mother's Day and Diwali.
The trends for recovery started showing after Valentine's Day, according to the Executive Director, Archies Ltd, Varun Moolchandani, told Business Today that the gift business is slowly getting back on its feet.
Archies is a 42-year-old gifting company with a market cap of Rs 63 crore.
We saw signs in Valentine's Day when people spent their money on gifts despite the Omicron scare. We had a lot of sales on Mothers Day. We think this Diwali will bring us pre-pandemic sales numbers. We will witness a significant recovery by the coming Valentines Day 2023, Moolchandani said.
During the pandemic, Archies pulled down the shutters on 75 stories across India, most of these were in malls.
Post-pandemic, the company has restructured its physical presence. We opened 16 stores over the last six months. 60 per cent of our stores were in malls before the epidemic. We will be moving 60 per cent of our stores to high streets. Because of the revenue sharing model of sales that most malls operate on, we decided to change our physical presence to give more control over our operations, Moolchandani said.
There has been a significant amount of sales online during the same period.
He said that we are currently on online-commerce platforms and that we will open an online store on October 10, which will allow people to access our gifting service from anywhere in the world.
In FY 21, Archies revealed sales worth over 75 crore, including online and offline sales figures.
In the last few years, the nature of gifts in India has changed with home-grown, made-in India brands becoming more and more popular. The most popular products on the gift shop racks are mugs, teddy bears, and combination gifts.
Chinese gifts are still quite popular and most Indians choose to gift either a mug or a soft toy. Some people like to combine a few things and make a pack, Moolchandani said.
Handmade and homegrown gifts will take a while to catch up with mainstream gifting business feels Moolchandani.
It is nice to see people creating small brands and developing unique products. Some of these brands are platformed, but it is interesting to see new varieties of products. Collaborations between a large platform like ours and niche brands is always possible. We also have specific tie ups for our watches, home d cor, perfumes and more. The Moolchandani added that our products are mainly paper-based greeting cards and stationery.
In the current festive season, people who are now going back to gifting with enthusiasm are a limited segment, says Arvind Singhal, Chairman, Technopak.
There is a relatively small segment of population that has the discretionary money to spend on non-essentials. Singhal told Business Today that one has to be careful in extrapolating such spending to consumer spending.