The appeal of storing up chutta or loose change from transactions with the nukkadwala kirana store was a joy in and of itself for many teenagers and young adults who lived up before UPI and digital wallets. But with the advent of the Unified Payment Interface (UPI), the system that permits transactions across smartphone wallets like Paytm and BHIM, the economy grew and so did payment transactions. Kids nowadays risk missing out on the excitement of making a little extra money while taking care of their parents’ errands.
Candy producers are losing money as a result of the growth of UPI and the digitization of payments. Recall how disappointed you were when Kiranawallah stated, ‘Chatta nahi hai, toffee le lo’? In a well-read LinkedIn article, GrowthX founder Abhishek Patil recently made a direct connection between confectionery companies’ declining sales in recent years and the advent of UPI.
‘Early in 2010, practically all major companies, including Mondelez, Mars, Nestle, Perfetti Van Melle, Parle, and ITC, announced astounding growth and future prospects. In 2020, the majority of these businesses have reported a sharp drop in toffee sales. One of the largest chocolate and toffee manufacturers in the world, Hershey’s, claimed that India is one of the markets most negatively impacted by the post-COVID period and that the expansions are questionable. So So what really changed?’ Patil wrote.
‘Prior to UPI, store owners would brazenly exchange loose change for toffees, a transaction that wasn’t taking place the other way around. According to several customers in research, these tiny sums over time did wind up accumulating substantial sums of money. All of this was stopped by UPI. People paid the precise amount that was required without room for negotiation, effectively consuming the daily toffee sales’, he said.
Deepak Shenoy, the founder and CEO of CapitalMind, remarked that the causal relationship can be deceptive. He highlighted Lotte India’s annual report, a well-known confectionery manufacturer in India, emphasising that the company had recorded ‘bumper sales’ in FY22 after experiencing a downturn in FY21. Lotte India also attributed the decline to school closures in FY21.
‘Seems to be the product of fantasy. Here are Lotte India’s findings, a company that mostly produces boiled candies: Their yearly report claims that the closure of schools cost them money in FY21. FY22 saw record sales,’ Shenoy stated.
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