How True Is Viral Claim Of UPI Killing Toffee Business
UPI killing toffee business sounds plausible. But is it backed by proof?
There's a common practice among Indian shopkeepers of handing toffees instead of loose change. With UPI payments now accepted everywhere even for small-value transactions, there is no need for such a barter. That should make toffee makers suffer. Sounds plausible.
Market analyst Deepak Shenoy says it's not true. The notion, he tweeted, is "a figment of imagination".
The founder and chief executive officer at Capitalmind Wealth was commenting on social media posts that attributed the rise of digital payments to troubles of confectionery makers.
There is data to establish the lack of correlation, Shenoy said.
In a LinkedIn post, Abhishek Patil, founder of the social learning platform GrowthX, claimed that several confectionary companies—including Mondelez India Foods Pvt., Mars, Inc., Nestle India Ltd., Perfetti Van Melle, Parle Products Pvt. and ITC Ltd.—are suffering a decline in sales with the rise in use of the Unified Payments Interface.
Shop owners stopped handing toffees in lieu of the balance as buyers started paying the exact amount with UPI, Patil said. The pandemic further boosted UPI usage, hurting toffee sales even more, he said.
UPI saw transactions cross Rs 11 lakh crore by value in September, according to the National Payments Corp. of India.
NPCI Global has recently joined hands with payment services facilitator Worldline to extend acceptance of Indian digital payment across Europe as well.
Shenoy, however, cited the annual report and financials shared by Lotte India for the year ended March 31, 2022, which showed the company recorded bumper sales during the fiscal.
"Their annual report says they were hurt in FY21 from schools shutting down," Shenoy tweeted. "FY22 was bumper sales."
Educational institutions conducted classes online in 2020-21 as the second wave of Covid-19 swept across the country. After the third wave scare at the start of this year, schools and other educational institutes have now reopened for physical learning.
The products that Lotte makes "should have died" with the rise of UPI, Shenoy said. But that's not the case.