Declining Men's Underwear Sales in India: sluggish economy?

Recent reports indicate a decline in rural consumption in India, raising concerns about the impact on consumer sentiment amidst rising inflation. This has led to apprehensions that India's growth trajectory could be hampered until inflation subsides significantly later this year, as projected by a recent RBI report.

Furthermore, there have been observations suggesting a decline in men's underwear sales, specifically during the quarter ending December 2022. Sales of men's innerwear experienced a significant drop of 55%, affecting prominent brands such as Jockey, Lux Cozy, and Rupa. According to renowned economist Alan Greenspan, this decline in underwear sales could potentially serve as a symptom of an economic slowdown.

The underlying assumption is that if men are purchasing fewer underwear items compared to previous periods, it implies a reduced expenditure on various fronts by both men and their families. Consequently, if overall consumption remains lackluster, there is a legitimate concern that economic growth will be negatively impacted in the foreseeable future.

However, skepticism surrounds Greenspan's Men's Underwear Index, as the theory has faced criticism in the past. In 2019, before the onset of the pandemic, The Print published a report suggesting that the decline in underwear sales could be attributed to the implementation of the Goods and Services Tax (GST) and demonetization. During that period, there was a noticeable drop in underwear sales, with one manufacturer quoted as stating that the entire innerwear industry experienced a sales decline of 20-25%.

Considering the broader context, it appears that current worries may be exaggerated. India's economy was not in a dire state when the decline in underwear sales was recorded. It was the pandemic and the subsequent lockdown measures that temporarily crippled the economy. Therefore, attributing the decline in underwear sales as a reliable indicator of economic performance might be overstated.

In conclusion, while concerns persist regarding rural consumption and the implications of decreased men's underwear sales, it is important to consider the larger economic landscape. The downturn in the economy can largely be attributed to the pandemic's impact and subsequent lockdowns. Thus, it is crucial to approach these indicators with caution and recognize that multiple factors contribute to the overall state of the Indian economy.