Monday, September 28, 2009

Kerala's dubious plan to become shopping destination

Gulf Today

THE Grand Kerala Shopping Festival (GKSF), which began on a quiet note three years ago, has become a major official effort to boost local consumer spending under cover of making the state an international shopping destination.

The inspiration behind GKSF, billed flamboyantly as Asia's biggest shopping extravaganza, is the Dubai Shipping Festival (DSF). Its seeds were sown when DSF organised its first show in India at Kochi in 2006.

The Malabar Shopping Festival, held at Kozhikode the same year, helped the state to fetch additional sales tax revenue of Rs50 million. That convinced the government that consumerism is in its interest.

DSF came to Kochi after its organisers found that families of many Keralites working in Dubai visited the Emirates for shopping at festival time.

They reckoned that the Kochi show would help them reach out to about five million Keralites who had direct association with Dubai through family members working there.

DSF did not come to Kerala a second time. But since 2007 the state has been organising GKSF with the co-operation of various commercial interests who benefit directly from it.

GKSF coincides with the worldwide shopping season covering the Christmas and New Year holidays. The entire state is supposed to become one huge shopping mall during the 46-day festival period -- from Dec.1 to Jan.15.

Kerala has three shopping seasons. The main one coincides with Onam, when Keralites traditionally acquire new clothes. In recent years, manufacturers have been aggressively promoting the sale of a wide variety of products including automobiles and home appliances during this period.

With Muslims constituting 25 per cent of the state's population, Eid time is also a major shopping season. Thanks to the extensive use of the European calendar, the popularity of the Christmas-New Year period as a shopping season extends beyond the 19 per cent Christian population.

There is no reliable data to ascertain the extent to which GKSF, now in the third year, has contributed to the growth of the Christmas-New Year shopping season.

The government had made a budgetary allocation of Rs150 million for the first GKSF in 2007 and commissioned a Dubai-based advertising group to promote it abroad. About 8,000 foreign business houses reportedly showed interest in it but only about 2,100 participated and most of them were local enterprises.

Initially, taking the cue from DSF's Kochi experiment, the state government targetted non-resident Keralites and their families.It sought to convey to the NRKs the message that they could come home and make purchases for the family here.

Since that message did not yield expected results, in the second year the government shifted the emphasis from NRKs to tourists.

Domestic arrivals had grown by 40 per cent and foreign arrivals by 25 per cent in the previous year, raising the turnover of the state's hospitality industry to Rs100 billion.

It also decided to turn GKSF into an occasion to showcase Kerala's traditional items like handicrafts, handloom fabric, marine products, coir, jewellery, cashew and spices. Spice fairs were held in Idukki and Wayanad, a cashew fair was held at Kollam, a coir fair at Alappuzha and a handloom fair at Kannur.

The budgetary allocation was hiked to Rs200 million that year. An outfit of the Malayala Manorama group was brought on board as media partner. With the help of commercial houses, the newspaper organised promotions and contests.

Jewellers joined the GKSF campaign in a big way. They added 40 kilograms of gold to the prizes on offer through devices such as lucky draws and scratch-and-win cards.

Annual gold sales in India are estimated at 800 tonnes. About 45 per cent of all gold transactions take place in Kerala, although the state accounts for only 3.5 per cent of the population.

As part of the bid to attract domestic tourists, a road show was held at Chandigarh, with an eye on Punjab, the state which is ahead of Kerala in both per capita income and expenditure. There is no precise information on Punjab's response to the marketing effort.

Although there is talk of making Kerala an international shopping destination, the government's real objective is to boost local consumer spending. Principal industries secretary

T. Balakrishnan, one of the prime movers behind GKSF, let the cat out of the bag when he said recently in a newspaper interview that the aim was to raise the Keralite's shopping bill, now estimated at a mere five per cent, to 30 per cent.

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