A big rush for talent and soaring salary offers in the white collar job market amid the 'Great Resignation' are boosting sales of premium smartphones, electronics and cars in the country even as overall discretionary spending has slipped.
Professionals who are switching jobs or getting retained by their existing employers at much higher salaries than before are upgrading their gadgets and cars in a rush of euphoria, brands and retailers said. This is driving higher value growth for marketers in categories like smartphones and consumer electronics even as their volume growth has slowed down in the last two months amid high inflation and rising in interest rates, they said.
"Young professionals are driving a sizable premiumisation in urban markets and also becoming key influencers in buying decisions, driving a higher share of sales of technologically advanced products," said Deepak Bansal, vice president at LG Electronics, the country's largest appliance manufacturer. "This is driving value growth for the industry since volume growth has come under pressure in the last few weeks."
At electronics retail chain Vijay Sales, volume growth for electronic products is 4-5%, while value growth is in excess of 25%, its director Nilesh Gupta said. People are changing jobs at much higher percentage of raise than pre-Covid, he said.
Shashank Srivastava, senior executive director, sales and marketing at Maruti Suzuki, said the opening up of the job market in tandem with improved sentiment have driven demand for more premium cars. "While there is a strong pendency for cars, the economic factors along with psychological factors are driving sales," he said.
To be sure, the car industry has remained insulated with demand continuing to remain strong.
"Consumers in corporate office clusters are not shying away from buying the most expensive smartphones and owning products which were largely restricted to HNIs (high net-worth individuals)," said Pulkit Baid, director at Great Eastern Retail that runs consumer electronics and appliances stores in more than 10 cities including Delhi-NCR.
Even in the auto industry, the share of vehicles priced more than Rs 10 lakh has more than doubled to 37% now from 16% in 2018.
Tarun Garg, director, sales and marketing at Hyundai Motor India, said the key factor in this shift towards premium cars is that it's driven by generation Z customers who are smart and get success relatively faster in life.