Professionals who change jobs or are retained by their existing employers for much higher salaries than before, improve their gadgets and cars in a rush of euphoria, said brands and retailers. This is driving higher value growth for marketers in categories such as smartphones and consumer electronics, even as their volume growth has slowed in the last two months amid high inflation and rising interest rates, they said.
“Young professionals are driving big premiums in urban markets and are also becoming major influencers in purchasing decisions, driving a higher share of sales of technologically advanced products,” said Deepak Bansal, vice president at LG Electronics, the country’s largest device maker . “This is driving value growth for the industry, as volume growth has come under pressure in the last few weeks.”
At electronics business chain Vijay Sales, volume growth for electronic products is 4-5%, while value growth is more than 25%, said its director Nilesh Gupta. People change jobs with a much higher percentage of increase than pre-Covid, he said.
Shashank Srivastava, senior director, sales and marketing at
, said the opening of the labor market in tandem with improved sentiment have driven demand for more premium cars. “While there is a strong dependence on cars, economic factors along with psychological factors drive sales,” he said.
To be sure, the auto industry has remained isolated with demand remaining strong.
“Consumers in business office clusters do not shy away from buying the most expensive smartphones and owning products that were largely confined to HNIs (individuals with high net worth),” said Pulkit Baid, director at Great Eastern Retail, which owns consumer electronics and hardware stores managed in more than 10 cities including Delhi-NCR.
Even in the car industry, the share of car price more than Rs 10 lakh more than doubled to 37% now from 16% in 2018.
Tarun Garg, Director, Sales and Marketing at Hyundai Motor India, said that the key factor in this shift to premium cars is that it is driven by Generation Z customers who are smart and achieve success relatively quickly in life.