India is a cash intensive economy, and after Modi’s surgical strike on black money i.e. demonetization, economy has disturbed from its usual current. Not only the common people lives have been changed albeit short term but impacted retailing sector a lot.
Retail sector in India is largely affected due to this decision. Markets are lacking of customers however, if we talk about IT retailers they are coping up slowly and steadily, even if opposition parties are ganging up to politicize this issue.
Due to liquidity crunch in the market, the money supply graph has steep fall, which has affected business badly. On the other hand, retailers are doing best to maintain market.
Kolkata partner Rajesh Saboo of Saboo Computers says “Our business has dropped 85 percent however, it is on short term basis, but on contrary it will benefit us long term. Right now people are in panic stage, may be we can see the results in after two quarters, as digitization will increase, people will be buying more gadgets, in turn it will benefit retailers.”
“after demonetization we are also encouraging consumers to pay via online platforms to curb this situation. Earlier we used to charge on credit cards payments but now we have waved off.” he added.
K L Lalani of Lalani infotech says“We are running at huge loss, sharp footfall in sales is recorded, initially after government step, it was steep 80 percent drop in sales, now it’s recovering in slow pace. One interesting point is that, before demonetization, our sales ratio for electronic transfer was 25 percent, while cash sale was 75 percent. Now the ratio has been reversed, 75 percent is card and electronic payment rather than cash sales. Through out year, we provide zero finance, EMIs and credits to our consumers. As you know, people in India will never change their habit of buying from retail, so we are hoping that in 6-8 months things will improve and market will do better.
Vinay Dugar of Supreme Computers says “After demonetization, government has restricted cash flow in many ways. Because of this limitation, cash was not available even for exchange and there was not surplus money even for the common people. Amount which is approximately around 6-8 lakh crore rupees going back into the bank, obviously liquidity has been sucked up. This has created a huge crunch in lives of people. So, we are trying to make up for essential things first, rather than immediate purchases for any kind of consumer products.”
He then added, “There has been a footfall and sales are unexpectedly down by 60-70 percent. To curb this effect we have tied up with many digital platforms, like paytm, e- wallets, etc. Also we are offering and promoting cashless offers like, consumers don’t have to give down payments.”
Asif Khan, CEO, Technocrat Infotech said “Earlier, demonetization cash was major payment mode but now, we are asking our customers to pay via online payment platforms, like debit, credit cards, paytm etc. We are not giving consumers special discounts, however we are giving them facility of Zero finance purchase.”
On market environment he concluded “Situation is worst, customers are not coming to market, there is no improvement in sales too. Political parties are also making ruckus on this issue. And in my opinion, this is not a short term effect, it will take an ample amount of time to normalize the situation of the retail sector.”