These unprecedented times have changed how the world functions... and how we as consumers and businesses engage in buying and selling.
The market has become a buyers’ haven given the excess supply of goods and utilities. Categories such as travel and tourism, consumer goods (FMCG), hospitality and real estate have suffered in the aftermath of the pandemic. Let us take the example of the hospitality sector - hotels and resorts that were earlier charging exorbitantly for staycations are offering amazing deals at throwaway prices.
And that’s because they have not had any business since the onset of the pandemic due to the travel restrictions. This has particularly helped franchise owners of IPL (Indian Premier League) teams to book the most luxurious of hotels for their players. The same hotels that would have usually cost them a bomb are now available at good rates.
Since the lockdown and movement restrictions eased, certainly, residents are venturing out more often. Almost all stores selling consumer goods have taken this opportunity to offer discounts, even in the 70 per cent to 90 per cent range. These are on offer almost every second week at the malls and being made to lure shoppers back to buying.
With the pandemic still not eradicated, there are restrictions on the number of guests at any location. This is an additional impact on restaurants and cafes after they had already suffered the brunt of the lockdown. That being the case, these restaurants are offering many enticing combo deals to attract diners... or delivery orders.
Burden of oversupply
The pandemic has also forced many expats to move back to their home countries due to job loss, which has resulted in an excess supply of residential as well as commercial properties. Property owners have not only reduced prices for ready-to-move-in properties, but also offering easy payment options with other benefits. Even rentals have dropped in prime areas by almost 15–20 per cent.
All of these phenomena are the result of the disparity in supply and demand. If a retail owner has 10 suppliers giving him a particular product at competitive prices, this will give him an option to evaluate the product, check out prices and choose the best deal. Here the buyer has the choice to make the decision.
At the same time, if he has only two suppliers, he knows he has limited options and has to take quick action or else could lose out on the opportunity. The sellers’ market was at its peak during UAE’s boom period between 2000 to 2007. Everything was on the rise, be it real estate or hospitality.
In contrast, the past seven months have brought on a full-scale buyers’ market. Simple economics says that a buyer can dictate terms when there is more supply than demand. Buyers are definitely enjoying the luxury of having those choices and the power to make a choice when they want.
- Anis Sajan is Managing Director at Danube Group.