As the government unlocks the country amid declining Coronavirus cases, the economy is picking up. The pent-up demand which was lost out April, May, June, July and August was reflected in September and now in October as the Indian consumers are on a buying spree.
The e-commerce companies, Flipkart and Amazon, sold goods worth 4.1 billion dollars in festive sales. Amazon’s Great Indian Festival and Flipkart’s Great Indian Festival fell around the same time and both companies registered massive growth over the sales figure for last month. Apple India posted record sales with 8 lakh iPhones sold in the country in July to September quarter, which is highest ever in a single quarter.
“Geographically, we set September quarter records in the Americas, Europe and rest of Asia Pacific. We also set a September quarter record in India, thanks in part to a very strong reception to this quarter’s launch of our online store in the country,” said Tim Cook, the CEO of the company.
Industrial activity witnessed V-shaped recovery in the last two months while exports are also rebounding riding on strong domestic and East Asian demand. India has come out of the losing streak to register 5.27 per cent growth in exports in September. The country exported goods and services worth 27.4 billion dollars in September this year which is 5.27 per cent more, compared to last year, said Minister of Commerce and Industry, Piyush Goyal.
According to Indian industrialists, this is the right moment to invest in India. Uday Kotak, the Managing Director of Kotak Mahindra Bank Ltd. said, “I have always believed you have to invest in India when things look more challenging,” during a conversation with David Rubenstein, Co-founder, Carlye Group Inc. at the Bloomberg India Economic Summit Thursday. Kotak added, “That’s the best time to put your money to work.”
Kotak said that overseas investors should look to invest in Indian digital to consumer sector companies as the economic slowdown triggered by the Pandemic has made business valuations attractive. He has also listed down five “right sectors”- digital, e-commerce, technology, pharmaceutical, and consumers for investing in India.
As the government lifts one restriction after another on economic activities, the economy has started to pick up, and the demand is going back to pre-COVID times. The unlocking of the economy is being done in a phased manner, and this has led to an increase in the demand for various goods and services. In fact, the pent-up demand has also come in September in the sector like Automobiles where the companies witnessed a 30-40 per cent jump in sales in the last month and 10-20 per cent for the last quarter.
Manufacturing Purchasing Manager Index, which has been diving into negative territory for the last six months, reached 8 years high to above 56 in September. GST collection, a reflection of demand for taxed goods in the economy, registered a rise of 4 per cent in September.
“With total sales of 3,93,130 units in Q2, the company registered a growth of 16.2% over the same period the previous year, on a lower base,” Maruti Suzuki said in a statement. Hyundai also witnessed a jump of 23 per cent in sales in September. Two-wheeler manufacturers are also operating on full capacity due to the rise in rural demand.
So, as the country opens up, the economy is picking up across the board and the pent-up demand is also being reflected from the latest purchases. Many consumers who saved money during the lockdown on various expenditures are now spending money on big-ticket purchases, and this will lead to a good performance of the economy in the next quarter.