Economic Boom – The Eid Way

Economic Boom – The Eid Way

July 31, 2016

by Taposh Ghosh

Bangladesh, having a Muslim population of approximately 148.6 million, experiences massive changes in consumer trends during the time of Ramadan leading up to Eid, every year. Changes in consumer behaviors and spending patterns take an unprecedented hike during this festive season resulting in an economic boom throughout the national economy. A 2014 World Bank report showed that the domestic Eid trade reached a staggering amount of $12 billion that year, and the amount can only be expected to rise with every passing year. With such an enormous population to cater to, the businesses have also prepared to bring in their A-game with necessary strategies and numerous marketing tools in their arsenal.

Intensified Pulse of the Economy

To keep pace with the increased spending on products during Ramadan and Eid, consumers evidently require greater amounts of money which as a result puts immense stress upon the financial institutions throughout the nation. Commercial banks face a heavy rush in consumers withdrawing money leading in the days leading up to Eid. As a result, liquidity shortages force the banks to borrow from the call money market to match the soaring demands. Every year during Eid, record number of transactions are processed in the call money market by banks and financial institutions which eventually leads to interest rates soaring through the roof. Bangladesh Bank has had to pump in record amounts of money into the banking system in the past to prevent such short term instabilities.

Effects of Eid expenditure by both consumers and businesses also ripple through the stock market as stocks show up with new zeal. Stock prices tend to go up slightly during this period backed by increase in confidence of investors. Remittance floods into the economy too at increased frequencies to support spending for families during Eid. In the past years, approximately one-seventh of all remittance earned throughout the year by migrant workers pours into the national economy during this particular period.

Imports are also expected to rise every year to meet the increased consumer demands, mainly for food products and other FMCG commodities. And inevitably, inflation soon becomes a problem that follows this unhealthy short term rise in demand for goods. In fact greater inflow of remittance also appreciate the Taka against the US Dollar – a crisis which often has to be sought after by the Bangladesh Bank by purchasing US Dollars to keep the export activities under check and not let the Taka experience any unprecedented growth which can be a problem as soon as this short lived boom ends.

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Robust Consumption Patterns

Every year, the holy month of Ramadan sees a consumption ritual by the Muslim population which is pretty much the same throughout the world. A report by Euro news shows that spending by Muslims in London increase by 25% every year during Ramadan and Eid. As it turns out, fasting throughout the day does not necessarily mean a decrease in consumption of goods. In fact usually Muslims all over the world tend to purchase more than what they actually need during this period, which is good for businesses however. These high levels of consumption generate great amounts of profits for the businesses contributing to the short term growth of the economy as opposed to any other time of the year.

In the past, Eid shopping in Bangladesh concerned the purchase of items with closer significance to the festival. Traditional attires, prayer caps, attar, surma, kohl, and footwear were the popular commodities which made the traditional Eid shopping list for consumers. However, buying behaviors have changed immensely since. Today, it ranges from convenience products to shopping goods to specialty products. From trending clothing to Iftar meals at restaurants – all fall under the buying patterns of a consumer these days. Some even make hefty purchases of electronic products, ranging from mobile phones to daily appliances, taking advantage of all the Eid promotional offers up for grabs by companies. Investing in real estate during Ramadan also has become a common phenomenon among well-off Bangladeshi consumers as per Lamudi.com.bd. The overall result is overwhelming sales in food, clothing, footwear, cosmetics, jewelry, and electronic products in the days that lead up to the festival.

Tailored Sales Promotions

The hysteria of the Eid market maybe short lived, but unleashes the most creative abilities of businesses to revamp their strategies and marketing budgets to target the busiest business season of the year. Sales promotions in the form of short term incentives is the most prominent way to go in order to induce the consumers to buy the offered products and services. Price packs in restaurants, prizes through contests, and tie-in promotions by service companies are some of the most common sales tactics used.

Restaurants in particular, experience immense business during this season and they come up with lucrative offers to take advantage of the market. Iftar buffets and mega platters are the way to go these days. Restaurants offering the most attractive offers are full to the extent that sometimes it gets impossible to get a seat without making a reservation beforehand. Hakka Dhaka, Sbarro, Pizza Guy, Tokyo Express, Kiva Han, etc. are back with their popular Iftar offers. Countless new restaurants and cafes have also opened up in the season prior to Ramadan to capture portions of the huge market that Ramadan has to offer.

Standard Chartered, much like previous years, is offering discounts of up to 30% on restaurant and 25% on shopping bills paid using SCB credit cards. Brac Bank has put up a never before seen Ramadan promotional offer of two complimentary Iftar and dinner buffets at the purchase of one, at selected restaurants throughout Dhaka using its Visa and MasterCard cards.  Discounts and other promotional offers on specialty products such as electronic appliances are also attracting consumers’ attention. Samsung has been offering trips to Bali and other cash discounts on the purchase of its products.

Targeting the Youth

Offering products and services catering to the need of the youth becomes important in a country like ours, which has a median age of 24. Marketers are coming up with innovative ways to reach out to this budding consumer base through various interactive marketing tools. Most businesses have given in to the fact that spending on advertisements on the digital space is more effective and less expensive compared to traditional media these days. Thus, an active Facebook page becomes imminent if you are looking forward to showcase your portfolio to a generation of youngsters who are always on the move, yet stuck to the screen of their cell phones.

F-commerce is experiencing boom and much of the promotions done by businesses and restaurants is conducted through Facebook pages these days. Restaurants also offer discounts to customers on checking-in to their locations on Facebook, creating buzz marketing as an effect. Online shopping portal Daraz.com.bd is back with its famous Mobile Week and Warehouse Run campaigns offering discounts of up to 64 and 54 percentages respectively on its products. To provide for the increased use of internet, Telcos such as Grameenphone and Robi are also not lagging behind in offering Data bonus packages to meet the consumer needs.

Strengthened Product Strategies

The Eid season calls for businesses to refurbish their products by giving it a fresh meaning for the festive season or launching a new product altogether. Fashion conscious people eye out the boutique houses for outfits, footwear, and accessories to match their tastes and express individuality and assertiveness. Among other fashion houses, Dressy Dale, Yellow, Le Reve, Aarong, and Shwapno are some that have already launched their Eid 2016 clothing line. Taking place in a summer-monsoon season this year, Eid demands its clothing line to consist of shades of blue and other sea colors alongside vivid summer contrasts and floral patterns.

Business strategies also focus heavily on CSR activities these days during the Ramadan and Eid season. Most businesses feel the urge to give back to the society during this festive season. Despite having no monetary gain, these activities do end up creating buzz and strengthening the brands. Knorr and Pureit have engaged in such a CSR activity this Ramadan. Named the ‘Share a Meal’ campaign, it aims to distribute 500 Iftar meals and safe drinking water daily to underprivileged children. Anyone can donate and participate in the campaign by logging onto Bdspiritoframadan.com.

Final Words

Marketers can often lose sight of their product positioning catering to the hyped consumer spending frenzy that Ramadan offers. Irrelevant marketing moves can attract attention in the short run, but can also dilute the brand’s overall image. Marketers should not merely focus on exposure, but also on a consistent message which creates value for the brand and helps consumers remember the product.

For Bangladeshi consumers, Ramadan and Eid combined is a festive season marked by holidays, shopping, feasts, and precious family time. Consumption during this period should relate to the value of this age-old religious tradition. Businesses must also make sure that their marketing strategies do not go overboard in gaining short term sales, and run the risk of lapsing some of the more traditional values, strongly held by the market.

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