Festive offers and schemes fail to stimulate customersDealers unveil their promotional schemes during this time of the year because people have money in their pockets from the Dashain bonus.
Despite the plethora of festive sales offers launched by dealers of clothes, automobiles and electronics, customers do not seem to be in a buying mood, largely due to lack of goods caused by import restrictions, high interest rates and a sharp rise in prices, traders say.
Sellers of a wide variety of products ranging from clothing, groceries and automobiles to consumer electronics have announced attractive schemes and offers to lure festival shoppers.
The offers and schemes give customers a sense of satisfaction and value for their money, insiders say. Many would-be buyers wait for dealers to launch schemes that usually begin before Dashain, as has been an annual tradition for a long time now.
Dealers unveil their promotional schemes during this time of the year because people have money in their pockets from the Dashain bonus, and they are anxious to buy things. People also save up to buy goods during the festive season because of the discounts.
According to the central bank, inflation reached 8.26 percent in August.
Four-wheelers are in short supply, said Ramesh Danekhu, marketing and communication manager of the Morang Auto Works Group, which is the authorised distributor of Yamaha, Skoda and Jeep brand automobiles in Nepal.
The company did not launch festive schemes and offers on Jeep. “Our automobile sales this festive season were down to 25 percent of last year's figure,” he said.
"There are no automobiles in the market because of the embargo. Banks are not providing auto loans due to which automobile sales have dropped sharply," Danekhu said.
"Also, there is limited stock of automobiles in the market and the latest models have not arrived due to the five-month-old restrictions. As a result, the choices are limited for customers."
An embargo on 10 types of products deemed “luxury goods” has been in place since April 26 to conserve foreign currency. On July 17, the Nepal government extended the import ban till August 30.
When the ban was first imposed in April, the government prohibited imports of mobile sets worth over $600 and motorcycles with a capacity of over 250 cc.
When that failed to stem the outflow of foreign currency, harsher restrictions followed; and mobile sets costing more than $300 and motorcycles with a capacity of more than 150 cc were banned.
The government has extended the restrictions on the import of automobiles, mobile phones, liquor and motorcycles until October 14.
Raju Chhetri, CEO of Yamaha Nepal, said that two-wheeler sales during the festive season were down by 60 percent compared to the same period last year. “It seems that customers are not in a spending mood due to the non-availability of the kind of bikes they are looking for,” he said.
“Also, I think that consumer sentiment during the festive season has changed to a saving mood due to the current economic situation,” Chhetri said.
"The company is offering a sure-shot Rs6,000 cash back with the purchase of a Yamaha two-wheeler and a 50-inch television set for buyers of two-wheelers through a lucky draw daily," Chhetri said.
“We used to provide a sure-shot cash discount of up to Rs8,000 in the past festive season,” he said, adding that the offers and schemes had not changed much from previous years.
For price-conscious consumers, discounts and freebies play a major role in their decision making. During the festival shopping season, brands try to capitalise on the habit of consumers to splurge due to the Dashain bonus.
“We did not meet the sales target for consumer electronics during this festive season,” said Bishnu Gyawali, deputy general manager at CG Electronics, authorised distributor of LG, TCL, Sansui and CG electronics brands in Nepal.
“We were expecting around 40 percent sales growth before Dashain, but this did not happen,” he said.
"Despite the schemes and offers that the company introduced during the festive season, there was no growth in sales as in past years," Gyawali said. “The sharp rise in prices is the major reason for the decline in sales and lack of cash flow in the market.”
According to Gyawali, CG Electronics is continuing its festive schemes till the end of Chhath and expects to make satisfactory sales growth even though the sales target will not be met. The company has launched a Rs46,000 cash back offer and a sure-shot gift hamper on different consumer electronic goods.
Domestic dealers say they have not held back on launching offers, schemes and marketing programmes for Dashain.
Ashish Shrestha, sales executive of Missio Nepal, a Hong Kong-based clothing brand in Nepal, said that sales of branded apparels were not as exciting as they used to be in previous festive seasons even though there were many offers and schemes.
"Sales have definitely fallen compared to last year’s festive season," Shrestha said. "Consumers used to spend heavily on clothing brands during Dashain, but it is not the same this year. Customer flow in the store is less despite the festive season.”