Valentine's Day 2023: Decoding the business of love on V-Day, and its role in the economy
Valentine's Day 2023: With online business growing fast, most companies have witnessed a significant rise in their profit on this day. Revenue earned from online businesses for these companies accounts for nearly 70 per cent of the revenue.
Valentine’s Day, or the 'Day of Love' is celebrated on February 14 every year. Along with adding special moments to the life of many, the day also brings some major boost to some businesses, while contributing significantly to the economy. On this V-Day Zee Business spoke to various stake holders, market experts and business owners to get an understanding how this day of love contributes to various business models in the country.
Valentine’s Day and the domestic economy
The National Retail Federation and Prosper Insights & Analytics revealed that spending this year will be one of the highest numbers on record for the February holiday.
Consumers are expected to spend $25.9 billion on Valentine’s Day in 2023, up 8 per cent over last year in the USA, shows a recent study by Forbes. Although the Government of India or any research firm in India has not released any such data specific to the Indian economy, the trend of surged spending is evident in India as well.
“In FY 2020-21 our revenues were 5413.90 Lakhs which got reduced by approximately 60 per cent, but after a long social distancing COVID period, people have realised the value of socialization and human touch. In FY 2021-22 the revenues were 7553.24 Lakhs showing a growth of 39.52 per cent,” said Varun Moolchandani, Executive Director- Archies Limited, a multinational retailer of greeting cards and gifts.
Not only such branded companies, even small-scale businesses in the flower market, but chocolate business also flourish during this period. Surendra Kumar Singh, a local florist in Noida, said that on this day, his income surges almost 10 times of his average earning. “On regular days, if a small bouquet of roses costs Rs 150, on this day, we get to sell the bouquet at Rs 350 or more. On other days, my average daily income is usually around Rs 1000-Rs 1200, on this day, it was around Rs 14,000 last year,” added he.
According to leading companies in the floral business, the flower market around Valentine’s Day in India is estimated at about Rs 500 crore, with major supplies coming from Pune, Bengaluru, Hosur, Coorg and Ooty. Moreover, India being one of the leading importers of flowers in the international market, the country draws a significant profit from the imports around this time.
Arif Fazlani, director, Soex Flora Pvt. Ltd, a leading floral exporter said in one of his recent media interactions that the market size reached Rs 231.7 billion in 2022 and it is projected to grow to Rs 460.6 billion by 2028, with a growth rate (CAGR) of 13.1 percent during 2023-28.
On the other hand, economists asserted the fact that the higher consumer spending in this period, boosts the economy to a considerable extent.
Business Growth
With online business growing fast, most companies have witnessed a significant rise in their profit on this day.
Vikaas Gutgutia, founder-managing director, FNP (Ferns N Petals), the largest gifting brand in India said that previously the business was primarily restricted to Tier 1 cities, but now even people from Tier 2 and 3 cities place orders through online modes.
“With a rapid advancement of technology, digitalization is galvanizing society cities, towns and suburbs in unprecedented ways. Hence from communication to socialization, shopping to business Tier 2 cities and towns are gradually matching the marketing potential of metros. For the past couple of years, we are experiencing a high volume of orders from Tier 2 and 3 towns,” he added.
Moreover, sale of gift items during this period contribute significantly to their overall profit. “Our all-time top-selling products include greeting cards; teddy bears have 8 per cent contribution in revenue, and mugs contribute 6 per cent,” Moolchandani said.
Revenue earned from online businesses for these companies accounts for nearly 70 per cent of the revenue.
V-Day driving the Financial Inclusion plan
The government of India has always promoted financial inclusion in the past few years. Thus, the fintech companies and the other players take the opportunity of V-Day to attract masses to the same. Various banks, card providers, e-commerce platforms, UPI platforms jointly introduce various offers on this occasion. Be it a homegrown platform like Paytm, or an international organization like American Express, companies have introduced several schemes customized to Indian customers.
“The scope of Valentine’s day has now been extended beyond its textbook definition with Galentine’s and self-love becoming the common inferences. There are various offers for Paytm wallet transactions during Valentine’s Day offer. Offer will be applicable only for categories aligned for which V-Day offer selection under various categories,” said Kanchan Mishra, Senior Director, Consumables (FMCG), General Merchandise and Home, Flipkart.
Similarly, FNP partnered with Amex for a special offer wherein customers can now avail 20 per cent discount while making a purchase with Amex card.
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