Digital Payment or UPI solved the problem of “change”, but also decreased toffee-candy sales
Abhishek Patil, the growth leader at Cred and Dunzo, claims in a post on Linkedin that the quick development and uptake of UPI by Indian customers caused a sharp decline in toffee sales. The National Payments Corporation of India developed the instant real-time payment system known as Unified Payments Interface. Transactions between individuals and merchants as well as between banks are made easier by the interface. It allows for the immediate transfer of money between two bank accounts using mobile devices.
Anyone who has ever stocked up on goods and products at a neighbourhood kirana store is familiar with the plight of the missing chutta. Chuttas here as well as at the nearby paan shops are transformed into candies. Chutta or change was comfortably—or rather, uncomfortably—replaced by candies while doing local shopping. But they failed to see UPI, which posed the greatest threat. Abhishek Patil, growth leader at Cred and Dunzo and founder of GrowthX, explained the shift during the pandemic that increased UPI usage while also endangering the market for sweets used as chutta by claiming that there was no place for them with UPI. In response to the problem, Patil claimed that in 2010, all major confectionery producers, including Mondelez, Nestle, Parle, ITC, and Mars, posted astonishing profits. Imagine the year 2020, when the sales of toffee for the majority of these brands fell precipitously. Even Hershey’s admitted that its expansion plans were questionable. The reasons for this reduction are several. One of them was the “candy-as-chutta scheme,” which was about to come to an end at the time of the epidemic. “Prior to UPI, store owners would shamelessly exchange loose change for toffees, a transaction that wasn’t taking place the other way around. As many buyers in surveys agreed, these tiny sums over days did end up acquiring substantial sums of money. All of this was stopped by UPI. People made exact payments without room for negotiation, which finally consumed the daily toffee sales, according to Patil. Due to the epidemic, consumers were also more interested in contactless payments, which pushed toffees as a form of change out of favor and boosted digital payments. He said in his post, “No chocolate (toffee) manufacturer would have ever thought of banking items as their competition. Patil also stressed the need of comprehending why individuals purchase a thing and what may conceivably alter that behavior. He stated that factors like candy and UPI—which aren’t really one’s direct competitors—could conceivably replace the use of a product. According to Patil, UPI put an end to the practice of giving candies in exchange for change since customers began paying exactly what they were supposed to, eliminating the need for change. Thus, the daily toffee sales suffered. As of the time this article was filed, the post had been shared by over 100 LinkedIn members. According to the entrepreneur, most toffee brands, including Mars, Mondelez, Parle, and others, have reported a sharp fall in toffee sales. India is one of the post-Covid era’s worst-hit markets, according to Hershey’s LinkedIn post. According to Patil’s conclusion, businesses and brands need to keep an eye on what drives customers to purchase a product and what can cause them to modify their habits. If a shopkeeper only had one or two rupees, they would offer chocolate. Throughout the day, a lot of chocolates were sold via this method. However, the issue of vacation funding is no longer an issue. Customers can pay online using UPI. The chocolate plan is nearly complete if there are no holidays. The sales of chocolates have drastically decreased as a result. In September, the payment through UPIs reached a milestone of INR 11 lakh crore, according to data made public by the National Payments Corporation of India (PTI) (NPCI). On the platform introduced in 2016, 678 crore transactions were made in volume during the month