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Demonetisation has proved to be a bonanza for e-wallet companies, according to Nielsen Mobile data. Weekly installation numbers doubled in the week after the announcement, as compared to the previous week, clocking an all-time peak of 28 per cent. A large part of this would presumably have been driven by aggressive advertising by these companies as well as quick adoption of digital payments by smaller businesses such as restaurant and cafes, kiranas , small vendors and auto-rickshaw drivers.
About 1.2 crore more Indians started using digital wallets in a single week. The reach of mobile payments increased by 6 per cent in the week of the announcement as compared to the previous week, to peak at the highest ever reach of 70 per cent. Usage frequency also surged by 15 per cent.
According to Nielsen Mobile, due to their heavy dependence on cash-on-delivery, e-commerce companies may initially face a setback, but with the market moving towards digital payments, the net effect will be positive for the industry.
Demonetisation had a major impact on modern trade. In fact, value growth in the week of demonetisation soared to 21 per cent vs a year ago - a whopping five times the general growth of FMCG for year-till-date. When the news broke on November 8, retailers were quick to use SMS to spread the word that they were accepting old notes, besides extending working hours, leading to a jump in sales.
Foods witnessed the highest increase in growth during the demonetisation week at 19 per cent vs year-ago. Within the food basket, packaged grocery and cooking medium saw a big upswing. Though the modern trade channel continues to witness high momentum, it is important to see how consumers behave in the traditional trade (contributing to 92 per cent of FMCG sales) where usage of credit/debit cards and liquidity remains a challenge.
Nielsen Mobile contacted over 3,200 traditional trade (TT) stores in the past week to assess the impact on them. “The most telling insight has been that most stores lag woefully behind on card machines, digital wallets or coupons. In fact, the figure stands at a dismal <1 per cent. Almost 62 per cent of dealers claim that there has been a dip in the business,” says the study. Impulse categories such as biscuits and salty snacks are taking the biggest hit, along with some personal care categories such as toilet soaps, shampoos and detergents.
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