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Dazed corporates go in for Diwali gifts squeeze Wednesday, October 31, 2001
News Source: Times News Network
AHMEDABAD: In a financial year marked by slipping top-lines and bottom-lines, spending on corporate gifts does not seem to be a priority for most corporates this Diwali.
Some companies, which have been badly hit by recession, are considering giving it a skip; while others, who cannot escape it, feel that allocation on gifts was an annual expenditure which can be squeezed without directly hurting the company's returns.
"At a time when most of companies were minimising their costs due to constrained cash flow, it is unlikely that they would indulge in expensive gifts. This festive season, corporate across all sectors will be seeing a general pull-back on corporate gifting. It would be restricted only to special and very important clients," said a spokesperson of a leading pharmaceutical company.
Corporate gifts are typically made by businesses to customers, employers, influential clients and suppliers during the festive season in acknowledgement of favours taken during the year. But with belt-tightening by corporates, the emphasis in most corporates was more towards dispensing regular fixed costs like employee salary than to appease a prospective client to keep its business running.
Even those on firmer grounds are either compromising on value of the gifts or have decided to slash their list of the recipients of gifts.
While better years have seen corporates gifts ranging from expensive imported perfumes, gold ornaments, silver coins and tea sets, dinner sets, watches and hordes of other goodies, the bend of the corporate gifts this year is towards paintings with corporate theme, greeting cards, household items, crystalware, chocolate gift packs and the good old Indian sweet packets.
Watches, for one, have lost favour as a Diwali gift this year. A local watch company, which had received huge orders from such major companies as Indian Shaving Products Limited (Gillette) is starved for orders this year. Whatever orders that have come its way are small in number, and no major corporate has placed any order.
Bank of Baroda (BoB), which follows a tradition of distributing sweets and dry-fruits to its employees and major clients, has cut its budgets for corporate gift by 20 per cent this year.
Havmor, the local ice-cream and dessert company, has pruned its budget by 50 per cent. It would be distributing its gifts on Dhanteras day, and does not want to let out the secret as yet. In the previous years, it had distributed such gifts as electronic home appliances. "There would be a comedown on the type of gifts we would offer this year," Havmor purchase manager Ajay Mistry said.
BOB public relations officer Jayesh Dholakia says such a fall was inevitable. "With the cash flow in most companies being hit, there was curtailment on costs which are not considered necessary. And spending on corporate gifts was not justified when there was other spending of greater urgency," he says.
The tiding for the coming festivals in December is also not too happy. Lufthansa, which has special German cakes _ Stollen _ flown down to India every year in December may not do so this year, and the way things stand today, the general sales agents (GSA) of the German airlines are not expecting any big festivities either.
News Source : The Times of India [India's best Newspaper]