GROWTH in India is slowing. The economy expanded by 5.3% in the year to the January-March quarter, the slowest for seven years. Shoppers are scrimping. Sales of consumer durables fell by 10-15% in the year to March 2012, executives say. Indian factories cranked out 30% fewer air conditioners and 15% fewer colour televisions, official data show.
Yet there is a bright spot: small-town shoppers are starting to splurge. Godrej, a family-owned conglomerate, saw its sales of white goods drop by over a tenth in big cities in the past fiscal year. But sales in towns of less than 100,000 people rose by 19%, and in villages by over 40%. Bajaj, another conglomerate, says small-town and rural sales have risen handily in recent years, to a quarter of its home-appliances business. Sales of motorbikes and mopeds have decelerated more gently than cars, an urban luxury.
“As far as I am concerned, the slowdown is not having an effect,” beams C.S. Gurubaran, as he plies customers with fizzy drinks in his home-appliances shop in Chengalpattu. Two years ago Mr Gurubaran would sell a dozen washing machines a month at most in this dusty town of 64,000 people in south India. He now sells that many a week. Fridges, food processors and fans are also shifting more quickly. A bride’s parents often buy a whole set of white goods as a dowry.
Government subsidies, good monsoons, high land prices and a low reliance on credit have thus far sheltered these consumers. Chengalpattu’s shoppers are mostly farmers who benefit from government-fixed floor prices for crops. Some have also made big sums by selling fields to developers. Poorer shoppers from nearby villages make money from a government scheme that guarantees 100 days of work a year.
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