GST 2.0: Consumer cos readying big festive splash to boost sales

Several leading consumer companies in India are enhancing their planned marketing and advertising budgets by up to 15-20% this festive season, extending through Christmas, following the GST cuts. These companies will be looking to attract new customers through lower product prices to drive sales and market share, executives said.

Reliance Retail, LG, Sony, Daikin, Haier, Blue Star, Parle Products, Amul, and V-Mart Retail are among companies set to step up spending from Navratri, which starts later this month, through December, coinciding with the period of highest consumer demand in the country. Automakers Hyundai, Maruti Suzuki, Stellantis India, and Mercedes-Benz India, among others also confirmed the trend.

Sony India is increasing its marketing activities and investments this Diwali season to capture and build on positive consumer sentiment, said Sunil Nayyar, managing director. The company expects sales of its large-screen televisions to grow 5-10% more than its earlier projections.


The GST cuts, effective September 22, will reduce taxes on a wide range of products, including cars, two-wheelers, large-screen TVs, air-conditioners, dishwashers, apparel and footwear priced up to Rs 2,500, and multiple daily use items such as biscuits, namkeens, toothpaste, butter, ghee, and toilet soap.

Mayank Shah, vice president at biscuit and confectionery maker Parle Products, said value growth may face pressure despite increased sales due to GST-driven product pack expansions and higher purchases. “So, we must increase our advertising spend than originally planned to grow revenue-led from market share-gain. After all, the October-December period is a big quarter,” he said. Parle Products is increasing its budget by 10%, while value retail chain V-Mart Retail will also raise its by 20%.

Hyundai Motor India, the country’s second-largest carmaker by sales, is planning a double-digit increase in festive promotional spend over last year.

Virat Khullar, associate vice president, marketing, explained that the carmaker’s advertising campaign, featuring brand ambassador Pankaj Tripathi, “has been designed to extend a range of attractive benefits and irresistible offers across product portfolio.”

Stellantis India, which sells Jeep and Citroen vehicles, is boosting regional campaigns across print, TV and radio, with CEO & MD Shailesh Hazela noting, “I wouldn’t call it our highest spend since we entered India, but compared to last year, the increase is significant. All I can say is—it’s a huge amount.”

Brendon Sissing, VP- Sales and Marketing, Mercedes-Benz India said the company will invest "appropriately in advertising during the current festive season. We have already rolled out our festive campaign called “Dreamdays”. It is a 360 degree marketing campaign across print, connected TVs, digital and on-ground activations. Spendings would be in similar lines as last year. We are confident of a buoyant customer mood after the GST 2.0 announced by the Government”

At Reliance Retail, as much as 80-90% of the fashion business is covered under the revised lower GST slab. AC manufacturers like Daikin and Blue Star are utilising unused budgets from the summer quarter, which was hit by unseasonal rains. “Every year we do a festive campaign around Diwali, but this year, it will be from Navratri itself,” said B Thiagarajan, managing director, Blue Star.

The October-December quarter remains India’s largest consumption period due to a series of festivals as well as the wedding season, with the festive period alone accounting for 25-35% of annual sales for several categories.

Jayen Mehta, managing director at Amul said the brand will begin campaigns with the Asia Cup cricket tournament, continuing through the festive and wedding season. “We are now confident of double digit growth for next 4-6 quarters,” he said.

Brands and industry associations like Bata, Amul, Assocham, and CII have already begun GST-themed advertising, while auto and consumer goods companies alike are stepping up campaigns from Navratri.

Auto dealers pointed out that while the second leg of the festive season this year is unusually condensed, compressing campaigns into a three-week window instead of the usual six would result in a spurt in advertising and marketing spends, featuring large campaigns.

“Automakers are sitting on heavy inventory, and with price drops across segments—from entry-level cars to luxury models—everyone will pump in money to cash in on the shorter, more aggressive window,” a dealer said.