Sales of drugs, mobiles, jewellery yet to recover

A MONTH AFTER NOTES BAN

IN THE last one month, the government’s demonetisation move has not only impacted the availability of disposable funds at the hands of individuals but also curtailed their ability to spend. Consequently, not only the sales of medicines, jewellery and mobile phones have decreased, there has been a significant impact on the functioning of microfinance institutions (MFIS).

More than 60 per cent of the chemists have reported a sales decrease in one-month period of October 30 to November 30, according to a survey of over 500 chemists by Quintilesims. The survey pointed that the impact has been starker among smaller retailers, as 75 per cent of them saw fall in sales. Large retailers were relatively less impacted.

On the other hand, approximately 46 per cent of the corporate chain outlets saw an increase in sales. Only 23 per cent retailers offered extended credit to buyers in North India, as opposed to 40 per cent or more in the East and West India. Almost 50 per cent retailers in the North did not accept old notes. “Patients here (in the north) may have thus resorted to a drug purchase only when absolutely necessary, in the face of a cash crunch, resulting in a clearer impact on footfall,” said the survey.

Feature phones and affordable smartphones, which are priced under Rs 10,000, have also see a big impact as most of them are purchased on cash. Estimates show that initially, sales were hit by as high as 90 per cent.

Keshav Bansal, director of Intex Technologies, said that their sales fell by 90 per

Feature phones and affordable smartphones, which are priced under Rs 10,000, have also see a big impact as most of them are purchased on cash. Estimates show that initially, sales were hit by as high as 90 per cent

centinthefirstweek.“ithasrecoveredandthe dip is now about 60-70 per cent. We think it will take at least three to four months to recover,” he told indianexpress.com.

The top executive of another leading smartphone brand in India said online sales have fallen 20-25 per cent as most of the orders were cash on delivery. “But the overall impact is lower than the industry for us. However, the supply chain has got impacted seriously as has the retail chain,” he said.

The MFIS witnessed a sharp decline in collections in the first couple of weeks as they collect weekly/monthly interest from their borrowers. In the first week the collections were down by up to 90 per cent for some MFIS said industry insiders. The situation has however improved in the recent weeks.

The jewellery sector has been worst affected by the demonetisation move as shortage of new currency has curbed buyers ability to purchase gold. Sales in the unorganised sector has fallen by up to 80 per cent across the country. All India Gems & Jewellery Trade Federation has also stated that the domestic jewellery industry has witnessed a contraction by over 80 per cent even as gold prices have fallen over the last one month.