Profit-starved pvt companies cut down Diwali gift budget
October, 22nd 2011
Corporate gift manufacturers in the city are headed for a dull Diwali. Usually loaded with orders during the festive season, these manufacturers are reeling under an 80% drop in business this year, thanks to profit-starved private companies drastically shrinking their gift budgets.
On this list are not just IT firms but also pharmaceutical companies, textile traders and other local commercial establishments that have trimmed their budgets for 'Diwali goodies'. Some companies have entirely done away with the 'gift' concept hoping to save a few extra bucks, sources said. "Apart from going slow on gifts for their employees, the companies have even decided to spend less on gifts for corporate 'connections' this time", said Snehal Jethwa, proprietor of Accolade, a corporate gift manufacturer, that has managed to bag just about a dozen orders this festive season. "This is a huge drop for us considering that we serve at least 60 companies every year." Pulling out of their list are largely pharma and IT clients, besides a few other small-time industrialists who have either downsized their employee base or have posted poor last quarter results.
But even the few that have decided to spend on corporate gifts have opted for inexpensive items such as T-shirts, diaries or small electronic products that cost not more than Rs 500, sources said. The high-priced (between Rs 1,500 and Rs 2,000) Diwali hampers comprising silverware, luggage or even dry fruit packs have been ticked off the list.
"There is absolutely no interest among corporates to indulge in such expenses this season. The few that are going ahead with it are doing so only because it has become an annual ritual now and they cannot avoid it," said Santosh Gupta, marketing manager of Attal Gift Solutions, Abids, adding, "As a reason, the cheapest gifts like wall hangings and stationery products are in maximum demand this time." In fact, these manufacturers guess that many would also be settling for sweet packets to keep their gift budgets low this festive season.
But while the steep drop in customer base has come as a huge blow to these traders, they admit that they saw this coming before Dasara.
"That is the time when the demand usually starts to pick up. People place small orders for Dasara and then book bigger ones for Diwali. By the time Dasara is over, we are flooded with enquiries.
This year, however, there are no such queries even now," said a sales executive at Archies in Madhapur. Apart from a few trinkets, the store has no other major orders to boast of this Diwali.