Fashion

Manyavar parent SSSG grows 47% over FY20

Louis Vuitton creates Insta filter for collaboration with ace designer

Merc Maybach S680 – first car bought by a Retail Entrepreneur

ABFRL strengthens TMRW with grand scale plans and D2C acquisitions

Garnier Opens Plastic Waste Collection Center – to Integrate Ocean-bound Plastic into Packaging

Retailers report steep drop in Sales after Deepavali

E-Commerce

Flipkart spent Rs. 15,020 Cr to earn Rs. 10,476 Cr in revenues
E-Commerce

Flipkart spent Rs. 15,020 Cr to earn Rs. 10,476 Cr in revenues

December 15, 2022
Big Basket spent Rs. 1.10 to earn Re. 1 in FY 21-22; Losses climb 4x
E-Commerce

Big Basket spent Rs. 1.10 to earn Re. 1 in FY 21-22; Losses climb 4x

October 11, 2022
Victoria’s Secret onboards Amazon

Victoria’s Secret onboards Amazon

June 25, 2022
Vinod launches 100% Virgin Aluminium Cookware
Indian Ecomm

Vinod launches 100% Virgin Aluminium Cookware

January 21, 2022
Friday, February 3, 2023
  • Login
Retail Updates
No Result
View All Result
  • FMCG
    • FMCG Food
      • Indian FMCG – Food
      • Regional FMCG – Food
      • StartUps FMCG – Food
      • International FMCG – Food
    • FMCG Non-Food
      • Indian FMCG Non-Food
      • Regional FMCG Non-Food
      • Startups FMCG Non-Food
      • International FMCG Non-Food
  • Fashion
    • Luxury
    • Womens’
    • Menswear
    • Kidswear
    • Innerwear
    • Accessories
      • Cosmetics
      • Eyewear
      • Footwear
      • Leather
      • Personal Care
      • Watches
      • Wearables
  • F&B
    • QSR
    • Traditional
    • Cloud Kitchens
  • E-Commerce
    • Amazon
    • Indian Ecomm
    • Services
  • Malls
    • Mall Chains
    • Standalone Malls
  • International
    • USA
    • Singapore
    • China
    • Middle East
    • SE Asia
    • Europe
    • Oz & Nz
    • SouthAm
  • Specialty Retail
    • Travel Retail
      • Airports
      • Metro Rail
      • Railways
      • Highways
    • Auto Retail
      • 2W
      • 4W
      • EVs
      • Fuel Retail
    • Liquor
    • Salons
    • CDIT
    • Grocery Retail
    • Home Improvement
  • Entertainment
    • Cinemas
    • Multiplex
    • OTT Platforms
    • Theme Parks
    • Others
  • Retail Tech
    • Digital
    • Retail AI
    • PoS S/w
    • Payments
    • Credit Cards
    • Crypto
    • Tech Delivery
  • Cities
  • Corporates
    • Industry Info
    • Global
      • Apple
      • Nestle
      • Walmart
      • Starbucks
      • Shell
    • Indian
      • Aditya Birla
      • Arvind Fashions
      • Future Group
      • Reliance
      • Tata Group
      • Shoppers Stop
      • ITC
      • HUL
      • Marico
      • Britannia
      • Dabur
      • Patanjali
      • Reckitt
      • Colgate
    • Listed Cos.
  • Opinions
    • Blogs
    • Videos
    • Interviews
    • Lockdown Impact
    • Editor’s Note
Retail Updates
Cash is (still) King

Cash is (still) King

by Editor
November 12, 2021
in Payments, Retail Tech
Reading Time: 4 mins read
0

Around 8pm on 8 Nov. 2016, the then Prime Minister of India, Shri Narendra Modi appeared on Tv, a rare occurrence until then to address the nation. Even as countrymen were going about doing their daily chores, employees returning home, entrepreneurs and shopkeepers doing brisk business and Senior citizens catching up on dinner, came an announcement that not just stunned Indians in the country and abroad but sent shock waves through socio-economic segments, from a humble street vendor all the way to those living in bungalows or high rises. The PM said that high value denomination currency of Rs. 500 and Rs. 1,000 were banned for circulation and usage from midnight the same day and shall not be accepted as legal tender henceforth. Citizens can deposit the cash they have at home in bank accounts of the holders or their families or friends. Retailers could accept the demonitized cash until the same day midnight but not thereafter. This was not something that Indians had ever been used to heard of.

Retail chains like Big Bazaar and Shoppers Stop took advantage of the situation and announced extended shopping hours, that their doors were open until midnight. Gold retailers across the country, small or big saw customers pouring in to their shops with small pouches and gunny bags (sic) of cash to exchange for the beloved yellow material. Cash on Delivery, a popular way of paying for goods ordered online was not as popular back then, as it was today, lest those 4 hours could’ve been the “highest retail sale day” for many e-commerce companies. Customers went to nearby shops and bought anything they could lay their hands on, from 40-50 kg rice bags, hoarding them for several months, all the way to buying as many units of soap & shampoo, clothes and bedsheets and everything possible. Plastic and metal items, which do not have an expiry date, such as chairs and utensils were among the most bought, for obvious reasons. However, things fell flat on 9 Nov.

YOU MAY ALSO LIKE

Reliance Retail’s wrench is to tighten FMCG supply chain, not to break’em

Mastercard powers Crypto Currency in SE Asia

The retail Industry stared a dead end, with a stoic silence across retail stores in the country. Shopkeepers, especially the small and marginal ones were perplexed and worried, whether shoppers would even turn up henceforth, as 99% of their business was “cash & carry”. Semi- and Organised Retailers were less worried. Back in 1999 when the Retail Industry started to become organised, the cash to card ratio (at PoS) was 80:20 respectively. However, by 2016, the ratio was way different, around 40:70, and even higher at Retail Department store chains and speciality stores at Malls. Flight bookings which went 100% online by 2010 onwards had no major impact while Entertainment booking through apps for Cinemas and shows was already mostly digital currency, though the box office collections were mostly by cash.

All this, and more changed ever since India’s major demonitization in 2016. PayTM, a start-up which was trying to convince consumers to pay through digital currency was perhaps the biggest beneficiary. The company, funded by Softbank and others took full page Ads in newspapers in the upcoming days to give up cash and use digital payments, for ease, convenience and most importantly, to make India a robust digital economy. While Opposition parties slammed the idea of instant demonitization without advance notice, many people in the society welcomed the move as it was meant to address the key challenge of India back then and now, hoarding black money. Whether this problem has been resolved or not is still to unfold. But the impact on the Retail business has been profound, to say the least.

A few days back, someone shared on social media, a person seeking alms on the road with a UPI QR code. Much was spoken and shared about how India is marching ahead in it’s journey towards a complete Digital Economy. Another shared how small traders and roadside hawkers were now accepting PayTM or G-Pay with a single scan. In fact, mobile phone manufacturers made the QR Scanner a key feature in their upcoming models, so consumers can pay quite easily with a single swipe. The most organised retailers, including those selling luxury in India have moved almost 100% to digital payments, through credit cards, e-payments, UPI interfaces and third party FinTech apps such as Google Pay. Small and Marginal shopkeepers have a higher share of e-payments now than ever before, though cash remains elusive and is an intrinsic part of their receipts. GST implementation, which began a year later in 2017 have ensured a more transparent transaction today, between the Manufacturer, Retailer and the Customer. Therefore, acceptance and preference towards digital currency is at an all time high in India today.

But everything is not rosy. Cash to GDP Ratio today is higher than what it was before Demonitization. From 11% in 2016, it is now at 12.5% with the actual values growing from Rs. 15.1 trillion to Rs. 28.3 trillion today. In actual value, the proportion of cash in current times is significantly higher than anticipated. The proportion of high denomination currencies in circulation, that is Rs. 500 & Rs. 1,000 back then was 84%, which is today almost the same, with Rs. 500 & Rs. 2,000 notes. Above figures were shared y the apex bank of India, the RBI. On the other hand, UPI-led transactions today are at 7.7 trillion pm, as against a mere 1.4 trillion 5 years ago.

Clearly, Indians are favouring digital payments for many transactions not just shopping, but also for utility payments such as Insurance premium, Electricity Bills among others. however, cash remains the most favourite payment option and as the adage goes, is the King in current times, especially for the low and marginalised consumer segment. From routine grocery purchases to eating out in the nearby restaurants, consumers in the lower end of the spectrum seem to prefer paying with loose change and cash. Those shopping in the organised segments are clearly favouring more of digital payments, though they are well aware of scrutiny and to disclose their incomes in IT Returns. Card payments, especially through credit cards have touched an all time high during the recently concluded Deepavali season, a key shopping period across the country. Consumers continue to swipe their plastic unmindful of payment timelines, lured by cash back offers from their banks and retailers alike. All this has certainly increased the consumer spends significantly, no doubt. Retailers have reported a higher basket value at the point of sale a few months after Demonitisation that before, a clear indication that customers prefer to buy now and pay later. While much has been debated on the benefits of the big move by the Government, retailers, at least are not complaining.

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to print (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to share on Tumblr (Opens in new window)
  • Click to share on Pinterest (Opens in new window)
  • Click to share on Pocket (Opens in new window)
  • Click to share on Telegram (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)
  • Click to share on Skype (Opens in new window)
  • Click to email a link to a friend (Opens in new window)

Like this:

Like Loading...

Related

Tags: cardscashCredit Cardsdebit cardsdemonitisationUPI
ShareTweetShare

Related Posts

Reliance Retail’s wrench is to tighten FMCG supply chain, not to break’em
FMCG

Reliance Retail’s wrench is to tighten FMCG supply chain, not to break’em

January 6, 2022
Mastercard powers Crypto Currency in SE Asia
Crypto

Mastercard powers Crypto Currency in SE Asia

November 12, 2021
Gobble raises ~USD 1 mn to expand self-checkout stores
Payments

Gobble raises ~USD 1 mn to expand self-checkout stores

September 16, 2021
No tears buying Onions anymore!
E-Commerce

No tears buying Onions anymore!

July 14, 2021
Guess which Indian city has highest number of Card Transactions?
Industry Info

Guess which Indian city has highest number of Card Transactions?

July 5, 2021

Listed Companies

PVR Cinemas admits reduce in Q3 compared with 2019
Entertainment

PVR Cinemas admits reduce in Q3 compared with 2019

by Editor
January 20, 2023
0

PVR Cinemas, India's largest multiplex chain had 1.78 lakh seats across 821 screens in India during the 9 months of...

Read more
Back to work impact – Metro Shoes reports highest ever revenues in Q1 FY23

Back to work impact – Metro Shoes reports highest ever revenues in Q1 FY23

October 11, 2022
Reliance Retail posts best-ever performance in Q1 FY2223, more to come

Reliance Retail posts best-ever performance in Q1 FY2223, more to come

August 14, 2022
Titan Industries grows 36% yoy | Tanishq Jewelry by 37% over FY 20-21

Titan Industries grows 36% yoy | Tanishq Jewelry by 37% over FY 20-21

March 6, 2022
Dominos India now at 1,500 locations – Revenues up 13%

Dominos India now at 1,500 locations – Revenues up 13%

March 6, 2022

FMCG

Quick Commerce – End of the Road?

Flipkart spent Rs. 15,020 Cr to earn Rs. 10,476 Cr in revenues

Big Basket spent Rs. 1.10 to earn Re. 1 in FY 21-22; Losses climb 4x

Daawat celebrates World Biriyani Day

Retail Horoscope for May 2022

Metro Cash & Carry expands frontiers in home turf Karnataka

Cities

Tamil Nadu allows Retailers to operate 24/7
Cities

Tamil Nadu allows Retailers to operate 24/7

by Editor
July 3, 2022
0

Tamil Nadu Government allows Retailers to operate 24/7, 365 days a year. Move to boost festival sales especially; retailers ecstatic...

Read more
LuLu Group to play LaLaLa in Tamil Nadu

LuLu Group to play LaLaLa in Tamil Nadu

May 1, 2022
Sunday Lockdown in TN may go – if cases reduce: Minister

Sunday Lockdown in TN may go – if cases reduce: Minister

March 6, 2022
KA State relaxes Weekend Lockdown; Shops, Restaurants to remain open

KA State relaxes Weekend Lockdown; Shops, Restaurants to remain open

January 21, 2022
D’Mart Earnings surge 106% for Q3, 105% for H1

D’Mart Q3 shows rural economy is bouncing back

January 12, 2022

Who We are…

Retail Updates strives it’s best to curate the latest in the world of Retailing from across the world and offers insights and analyses.

No Result
View All Result

In case you missed…

  • Manyavar parent SSSG grows 47% over FY20
  • PVR opens at Chennai Airport
  • Reliance Retail reports Rs. 67,000 Cr Q3 revenues

Search by Tags

E-Commerce F&B Fashion FMCG Industry Info Latest News Listed Cos. Lockdown Impact QSR
  • FMCG
    • FMCG Food
      • Indian FMCG – Food
      • Regional FMCG – Food
      • StartUps FMCG – Food
      • International FMCG – Food
    • FMCG Non-Food
      • Indian FMCG Non-Food
      • Regional FMCG Non-Food
      • Startups FMCG Non-Food
      • International FMCG Non-Food
  • Fashion
    • Luxury
    • Womens’
    • Menswear
    • Kidswear
    • Innerwear
    • Accessories
      • Cosmetics
      • Eyewear
      • Footwear
      • Leather
      • Personal Care
      • Watches
      • Wearables
  • F&B
    • QSR
    • Traditional
    • Cloud Kitchens
  • E-Commerce
    • Amazon
    • Indian Ecomm
    • Services
  • Malls
    • Mall Chains
    • Standalone Malls
  • International
    • USA
    • Singapore
    • China
    • Middle East
    • SE Asia
    • Europe
    • Oz & Nz
    • SouthAm
  • Specialty Retail
    • Travel Retail
      • Airports
      • Metro Rail
      • Railways
      • Highways
    • Auto Retail
      • 2W
      • 4W
      • EVs
      • Fuel Retail
    • Liquor
    • Salons
    • CDIT
    • Grocery Retail
    • Home Improvement
  • Entertainment
    • Cinemas
    • Multiplex
    • OTT Platforms
    • Theme Parks
    • Others
  • Retail Tech
    • Digital
    • Retail AI
    • PoS S/w
    • Payments
    • Credit Cards
    • Crypto
    • Tech Delivery
  • Cities
  • Corporates
    • Industry Info
    • Global
      • Apple
      • Nestle
      • Walmart
      • Starbucks
      • Shell
    • Indian
      • Aditya Birla
      • Arvind Fashions
      • Future Group
      • Reliance
      • Tata Group
      • Shoppers Stop
      • ITC
      • HUL
      • Marico
      • Britannia
      • Dabur
      • Patanjali
      • Reckitt
      • Colgate
    • Listed Cos.
  • Opinions
    • Blogs
    • Videos
    • Interviews
    • Lockdown Impact
    • Editor’s Note

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
 

Loading Comments...
 

    %d bloggers like this: