July, and August so far, have been write-off months for the trade. In response to the announcement of GST implementation and the frantic pace at which the trade set out to dispose off stock at heavy discounts, consumers went all out and advanced their purchases. All brands reported record sales, and the last five days of June were just madness, with showrooms selling till midnight.
A quick dip survey of dealers indicates that since then, there have been price increases in the range of 0–4 percent (some brands have withheld price increase, as they work out the actual impact of the input tax credit). This has not had much impact on sales, as there has been major decline in footfall. The dealer fraternity is not able to really gauge the impact of GST. The acid test will come around festive season, commencing from Onam, through Ganesh Chaturthi to Diwali, when there may not be the customary trade discounts and freebies for the consumer.
The seasoned, cautious dealers have expressed that GST is perceived by them as a death-knell. Small businesses as theirs- with 37 filings required in a year, and with constant tinkering by the powers that be- may finally be forced into extinction. Only the outlets in large malls, retail chain stores, and the e-commerce business will thrive. Their detailed profit calculation, they explain, presents a dismal picture.
In the meantime, Amazon India has announced its Great Indian Sale. The e-commerce giant is upbeat on India. Having pumped in Rs.13,800 crore already, it has reiterated its overall investment commitment of Rs.33,500 crore. Flipkart is not far behind. It has announced its Big Freedom Sale and claims of being ahead of its counterpart by 30 percent in the last few months.
The consumer remains in an enviable situation. While some brands withhold price increase, retailers struggle to keep their heads above water, the e-commerce companies continue to offer crazy discounts amidst heavy losses, while consumers get world-class products, at never before prices, at their doorstep!