The economic slowdown has prompted companies to delay transfers of their employees. This has hit the business of movers and packers in the last three to four months.
Movers and packers have reported a sharp fall of up to 70 per cent year-on-year (y-o-y) in business enquiries in the last few months.
Agarwal Packers and Movers, one of the largest players in the segment, saw transfers (employee relocation) drop by 25 per cent during August, September and up to mid-October this year, affecting their business correspondingly.
Vijay Packers and Movers also witnessed a 15 per cent drop in business enquiries during September and October this year compared with last year. “This drop in business has led to a situation where firms that want to continue with the business have to take a hit in their margins by 10 per cent,” said Ranvir Kumar, Manager-Bengaluru, Vijay Packers and Movers. Another Delhi-based packer and mover, requesting anonymity, said it has seen a 70 per cent drop in business queries during July, August, September and October this year. The company’s official also said that the movers and packers business clocked slower growth in the last four to five years due to factors such as lowering or capping budgets provided to employees in case of a transfer, houses “furnished” or pre-attached with consumer durables and furniture. All this reduces the demand for transportation of goods.
According to industry estimates, India’s movers and packers business is estimated to be in the ₹10,000 crore-15,000 crore range annually.
Peak relocating period
Agarwal Packers and Movers reported good growth during the peak season this year. “For movers and packers, March, April, May June, July are the peak business months as that is when most people shift their goods across cities. We saw a 22 per cent growth in our business during March to July 2019 against March-July 2018,” said AK Agarwal.
And with the top 60 cities now saturated, Agarwal Packers and Movers now plans to set up offices in another 25 cities, where business will be largely pushed by government and public sector units’ postings.
Other large companies in the cargo transporation business are also mirroring similar slowdown numbers. Transport Corporation of India Limited (TCI), which saw the slowdown begin around Diwali last year, expects a sustained recovery in growth only after monsoon next year. “We feel there will be sustained recovery only post-monsoon next year,” said Vineet Agarwal, MD, TCI Limited.