Hit by slowdown, corporate houses cut down on Diwali giftsOctober 25th, 2008 - 11:41 am ICT by IANS
New Delhi, Oct 25 (IANS) The economic slowdown has dampened the festive mood this season, with even business houses slashing their budget for corporate gifting by almost 25 percent.According to an industry estimate, the festive gifting market, largely unorganised, is estimated at Rs.45 billion (nearly a billion dollars).
“Last year, corporate houses distributed gifts worth Rs.20 billion, but this year the budget has come down by Rs.5 billion,” said D.S. Rawat, secretary general of the Associated Chamber of Commerce and Industry of India (Assocham), an industry lobby.
“It is not only the small corporate houses that are cutting down their budgets for corporate gifting during Diwali. Even companies like Videocon Industries, JSW steel, Tata group and large automobile, retail and real estate companies are going slow this festive season,” Rawat told IANS.
Concurred Phani N. Raj, managing director of corporate gifts and brand merchandising company eYantra Industries: “The gifting sentiments are bit low this year thanks to the slowdown and bad profit margins.”
The company caters to the corporate gifting of around 1,000 corporates across the globe including giants such as Microsoft, Infosys, Wipro, Google, Satyam, Dr Reddy’s and Aurobindo.
“Last year, we got expensive orders for electronic goods like iPods, digicams, camcorders, mobiles and portable DVD players. However, this season, we are getting orders for gift sets like pens, watches, valets, keychains, and perfumes.
“The major cost cutting has come from IT companies. Obviously, the impact of slowdown is reflected,” Raj told IANS.
The only item that is doing brisk business is dry fruits. According to the Assocham report, dry fruits sales have gone up by nearly 40 percent in the past few days as these are considered handy and most acceptable commodities.
What is also significant this year is that most business houses are going for Chinese gift items because of their cost competitiveness and attractive packaging, Assocham’s Rawat said.
“The sparkle is certainly missing this festive season as even big corporate houses are cutting back their expenses. This year, we have received almost 20 percent fewer orders than previous year,” said Ravi Chopra, a salesperson at online florist and diversified gift seller Fern N Petals.
“It is tough time ahead for us. Corporate gifting during Diwali is a relationship-building tradition and we cannot cut down the spending straight away. However, we are looking at less expensive gift items. After all we have to compensate somewhere,” said the vice president at a leading software company, who asked IANS not to identify his firm.