‘Chutta nahi hai': How UPI is killing toffee business
2 min read . Updated: 14 Oct 2022, 11:12 AM IST
Premium- Popular candy brands such as Mondelez, Mars, Nestle, Perfetti Van Melle, Parle and ITC reported a steep decline in sales since 2020
India’s mobile bank-to-bank instant payments system, the Unified Payments Interface (UPI) has become ubiquitous in almost every shop. UPI payment is a financial revolution that the country began to witness since demonetization and the trend leaped during Covid-19 pandemic.
While the adoption of digital payment is a progressive move, it is spelling doom for the toffee/candies business in the country.
According to a LinkedIn post by GrowthX founder Abhishek Patil, popular candy brands such as Mondelez, Mars, Nestle, Perfetti Van Melle, Parle & ITC reported a steep decline in sales since 2020.
Back in 2010, 'chutta' in the form of candies dominated at local paan shops and Kirana stores. Candies replaced chuttas or 'change' while shopping at groceries stores. However, as UPI penetration went through the roof, the sales of toffee makers has begun to plunge.
Patil cited Hershey’s statements, which is of the world’s biggest chocolate and toffee maker in his post. Hershey's said India is one of the worst-hit markets in the post-Covid era and the expansions are uncertain.
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What changed?
Before the UPI, shopkeepers traded candies for loose cash. These small amounts did wound up becoming large sums of money, as accepted by many buyers in studies. With UPI, all of this stopped. People paid the exact amount that was due with no scope for change, ultimately eating up the daily toffee sales, Patil added.
Further, with the entry of the Covid-19 pandemic, people shifted to the 'contact-less payment' mode. The pandemic created a soft push towards digital payments and toffee went off the picture.
"No chocolate (toffee) company would have ever thought of finance products as their competition," the founder said.
Lastly, Patil the importance of understanding the reasons people buy a product and what could potentially change the behaviour. he said one should evolve their product offering and distribution to avert shocks like UPI.
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