Indians Slow the Shopping Spree

Sales Drop Sharply During Holiday Spending Season

GURGAON, India -- When Moshumee Jha moved to a luxurious suburban condominium called Belvedere Towers four years ago, she had never shopped in a mall before.

But within months, her home was surrounded by six new, gleaming, glass-fronted malls, and a whole new world of air-conditioned shopping opened up for her. Like millions of Indians, she grew to love weekends browsing the shops as soothing elevator music played in the background.

That was before the slowdown. In recent weeks, she has cut back on her visits because of her concerns about the economy.

On Sunday, when she went to buy the ritual piece of gold for this week's Diwali festival, she was shocked.

"It was almost empty, there was no crowd. 'Is it just me here?' I wondered," said Jha, 41, a portrait photographer and mother of two. "What has happened? Where is everybody? Where is the festival shopping rush?"

For the first time since Indian malls began to boom seven years ago, shopping has dropped sharply. For merchants, the timing could not be worse: In the midst of India's most important month for retail, worries triggered by the worldwide financial meltdown are scaring away customers.

Much like the Christmas season in the United States, the Hindu holiday of Diwali, which was Tuesday, is traditionally a time of consumption-driven celebration. It is considered an auspicious season to buy clothes, jewelry and home appliances, and to decorate homes.

An extensive retail survey by Bangalore-based Harish Bijoor Consults taken this month in 38 malls across 10 cities has reported a drop in mall visits and buying. The survey showed a 22 percent decrease in buying and a decline of 14 percent in people visiting stores, compared with the average for the previous three months.

Harish Bijoor, the firm's chief executive, said the numbers are particularly alarming because the October festival season is usually accompanied by a sharp spike in sales.

"People have money in their hands, but they are not sure where the next month's or next year's money will come from," Bijoor said. "During festival season, Indian consumers usually take a short-term view of money availability. But this time, they are saying, 'I will wait and watch.' "

Bijoor's study showed that consumers were haggling and demanding discounts even at some of the most prestigious stores.

"Haggling would have been beneath one's dignity among mall-goers earlier. The economic slowdown is a complete reality now in the Indian buying market," he said.