Indians lapping up festive gift packs

Demand for festive packs of discretionary products such as gourmet foods, premium liquor, and beauty and cosmetic products has exceeded supply in the past week, executives said.

"We are seeing unprecedented demand for corporate gifting orders, which has overtaken supplies," said Amit Dutta, chief executive of premium and gourmet packaged foods retailer Le Marche Retail. "Our inventory and supply teams have been doubling down on stocks in the past week."

To prevent stock-outs, executives said they are stepping up supplies across channels and are pushing new launches to feed demand that's beating expectations. They are also increasing backend, delivery and warehousing staff.


Leveraging Quick Commerce
Companies said they are also leveraging quick commerce, which usually caters to daily essentials, to feed the surge in demand for gifting.

Mondelez India is introducing a segmented portfolio across channels and different price points.

"Our retail partners across traditional trade, modern trade and ecommerce have seen strong offtake this gifting season, and quick commerce is fulfilling last-minute gift shoppers," said Desmond D'souza, senior director, sales. The maker of Cadbury chocolates and Oreo cookies is spreading access to its gifting portfolio in the rural markets too, he said.

Most of the sales are coming from discretionary categories. Executives said festive gift packs, especially of hampers of chocolates, gourmet snacks, premium alcobev drinks including wines, beauty and cosmetic items, and household decor, have seen a steep surge in demand both offline and on ecommerce platforms. Some categories have seen growth doubling over last year, they said.

"We have planned our supply chain accordingly and are seeing over 100% growth in volume over the same period last year," said Ankur Bhatia, chief executive at Radiohead Brands, which makes Jimmy's Cocktails non-alcoholic mixers. He said the company is on track to grow revenue by 150% over the last festive season.

The surge in demand is despite rising inflation, with prices higher than in the last two years. The past year has seen the cost of food, fuel and raw materials such as wheat and sugar touching all-time highs. While prices of some commodities such as palm oil have softened in recent months, most companies have not reduced prices.

"We are seeing increased revenge spending despite inflationary pressures. On ecommerce, our gifting business has doubled over the festive season of last year," said Kalpesh Parmar, general manager at Mars Wrigley India, which makes Galaxy, Snickers and Twix.

Festive demand in the past two years was inconsistent on account of Covid-19 operating curbs and subdued consumer sentiment, which has rebounded along with on-ground events and travel. Executives said they expect the momentum to continue beyond Diwali.

"This year, the festive quarter looks very promising. Social gatherings, events, festivals, and wedding season would result in higher consumption and demand in the coming months," said Amar Sinha, chief operating officer at Radico Khaitan. He said the company has introduced new products across different categories, such as Magic Moments vodka cocktails and After Dark Blue Whisky, with expectations of continued higher demand. Diwali is the single biggest gifting occasion in India, with 45% contribution to overall gifting coming from the festive quarter of October-December.

"Gifting is back with a bang. We have launched over 50 festival-centric gifts in recyclable packs. Additionally, we have seen the highest-ever festive launches this year," said Vishal Chaturvedi, vice president at The Body Shop, which sells premium cosmetics and skincare products.

Ferns N Petals said the company's gifting hamper category has seen a 70-80% spike and it has activated alternate sources of supply.

"Despite the rising inflation, the propensity to spend is the highest this year," said Manish Saini, chief executive, ecommerce, at the company. "We are seeing a surplus in demand and two-fold increase in ticket size."