Lobb is an e-commerce platform for the trucking industry. It helps truckers and transporters to do business transactions in a more transparent, efficient and profitable manner ensuring a much better experience for all parties concerned OR for all stakeholders.
Wednesday 4 April 2018
E-way Bills :Over 17 lakh e-way bills generated in 3 days
Over 17 lakh e-way bills for inter-state movement of goods have been generated by businesses and transporters since the launch of the GST anti-evasion measure on April 1, an official said today.
The number of e-way bills generated on its platform has been steadily rising with 2.59 lakh bills on April 1, followed by about 6.5 lakh and 8.15 lakh bills in the subsequent two days.
Among states, Gujarat tops the list of e-way bill generation with 3.6 lakh bills generated during April 1-3, followed by Karnataka at 2.65 lakh bills. Karnataka is the only state which has also launch e-way bill for intra-state movement of goods, along with inter-state.
"Going by the trend, the total number of e-way bills generation is likely to touch 9 lakh today. On a daily basis, we are expecting a 5-10 per cent increase in the generation of bills," an official told PTI.
From April 1, transporters of goods worth over Rs 50,000 have been mandated to generate an e-way bill, which would be required to be presented to a GST inspector, if asked.
This is being touted as an anti-evasion measure and would help boost tax collections by clamping down on trade that currently happens on cash basis.
The GST Council, last month, decided on a staggered roll out of the e-way bill starting with inter-state from April 1 and intra-state from April 15.
The official said a decision on which states should be in the first phase of intra-state roll out would be decided after stabilisation of the current e-way bill system for movement of goods from one state to another.
"We are seeing an uptrend in e-way bill generation. Once the number of such bill generation plateaus, a decision on intra-state launch would be taken," the official added.
Abhishek Jain, Partner at EY, said the e-way bill roll out has been smooth, in line with the government's promise of setting in motion a stabilised system. "The strategy of the government to introduce inter-state e-way bills in phase 1 and intra-state in later phases has worked out pretty well," Jain said.
The e-way bill provision of the goods and services tax (GST) was first introduced on February 1. However, its implementation was put on hold after the system developed glitches in generating permits. With several states also starting to generate intra-state e-way bills on the portal, the system developed a snag. Since then, the platform has been made more robust so that it can handle as many as 75 lakh inter-state e-way bills daily without any glitch. "Second innings of e-way bills is having a smooth run, and overall response from trade and industry is encouraging. In the last couple of days, not even a single grievance has come in on the technology front," AMRG & Associates Partner, Rajat Mohan, said.
Data retrieved from e-way bills would also support the government build analytics around tax collections on a real-time basis, Mohan added.The implementation of the nationwide e-way bill mechanism under GST regime is being done by GST Network in association with the National Informatics Centre (NIC).
b) Sub-type: Select the relevant sub-type applicable to you:
c)Document type: Select either of Invoice / Bill/
challan/ credit note/ Bill of
entry or others if not Listed
d) Document No. : Enter the document/invoice
number
e) Document Date: Select the date
of Invoice or challan or Document.
Note: The system will not allow the user to
enter the future date.
f) From/ To: Depending on
whether you are a supplier or a recipient,
enter the To / From section
details.
Note: If the supplier/client is unregistered, then
mention ‘URP’ in the field GSTIN, indicating that the supplier/client is an
‘Unregistered Person’.
g) Item Details: Add the details of the consignment (HSN code-wise) in
this section:
·Product name
·Description
·HSN Code
·Quantity,
·Unit,
·Value/Taxable value
·Tax rates of CGST and SGST or IGST (in %)
·Tax rate of Cess, if any charged (in %)
Note: On the implementation of E-way bills, Based on the details entered
here, corresponding entries can also be auto-populated in the respective
GST Return while filing on GST portal.
h) Transporter details: The mode of transport(Road/rail/ship/air) and
the approximate distance covered (in KM) needs to be compulsorily mentioned in
this part.
Apart from above, Either of the details can be
mentioned:
1.Vehicle number in which consignment is being
transported.
Note: For products,
clients/customers, suppliers, and transporters that are used regularly, first
update the ‘My masters’ section also available on the login dashboard and
then proceed.
5 Click
on ‘Submit’ system validates data and throws up an error if any
Otherwise,
your request is processed and the e-way bill in Form EWB-01 form with a
unique
12 digit number is generated.
Print and carry the e-way bill for transporting the goods
ith the GST, and a newly-accorded infrastructure status, what will this February 1 Budget mean for logistics?
The February 1 Union Budget will have all eyes trained on it; and not just for the usual reasons. This will be the first Budget after the implementation of the Goods and Services Tax, and the last for the current BJP-led NDA government before the general elections in 2019.
The FY19 budget will also hold higher relevance for the logistics sector as it was accorded infrastructure status in November last year.
While Niti Aayog Vice Chairman Rajiv Kumar said the upcoming Budget would not be populist, industry experts believe otherwise, and many are sceptical of the sops that might be announced.
Budgetary allocations aside, the one announcement in the last Budget that roused a good deal of excitement in the startup space was that logistics startups, like HipShip, and young logistics companies like Delhivery, Blackbuck, Rivigo, and Shadowfax, were allowed to use railways for end-to-end solutions.
The logistics sector includes road transport - comprising small businesses, truck fleets, and large transport companies - the warehousing sector, and third-party logistics companies, both big and small. With the growth of technology and digital commerce, logistics has a stronger role than ever before, and naturally, the focus on it is greater.
What lies in store for the logistics sector this Budget?
The Union Budget for 2017-18 earmarked Rs 2.4 lakh crore for the transport industry, of which Rs 1 lakh crore was for the Railways, and Rs 64,000 crore for national highways.
Jayaram Raju, Co-founder of LOBB, a logistics startup, explains:
“Imagine a startup has to ship one ton of oranges from a farm to the closest railway station at Rs 3 per km, and be loaded onto special perishable containers. When the train reaches its destination, the same startup picks up the items, and ships them off to warehouses. From there, the produce is sent out to kirana stores and retailers. All these services today are based on technology, and will have the smartphone at the centre of the ordering mechanism.”
So, what are startupsexpecting from Finance Minister Arun Jaitley?
Better representation of issues and a seat at the table in the ministry
Ajay Rao, Co-founder, Emiza, a Mumbai-based third-party logistics firm, says:
The recognition of logistics with industry status was a major milestone for the sector. We expect to see a lot of sector-specific policies, and better representation of our issues. More importantly, a seat at the table in the ministry. It is still early days, but the path has been laid for the sector's development.
Increase allocation for infrastructure and agriculture
Venu Kondur, Co-founder, Lobb, a Bengaluru-based logistics tech startup, says:
The key expectations are to increase allocation for infrastructure and in agriculture. If this happens, the logistics sector will benefit going forward as domestic consumption is rising.
Reforms, rules, and taxes for the e-commerce industry
With the emphasis on the data penetration boom, e-commerce is a major opportunity for the entire logistics industry. The upcoming budget will see reforms, rules and taxes being framed for the entire e-commerce industry, which, if done properly, can boost the entire sector, as has happened across the world.A populist FY19 budget?
The 2017-18 budget was balanced, industry participants say, and did not cater to populist demands. However, if the fear of a populist budget this time comes true, one can expect an increase in indirect taxes, huge waivers of agricultural and SMEs loans, and higher government spending on agriculture, and textile industries.
“If the budget is populist, then banks may tighten up credit for other sectors, and it could slow the economy,” says Jayaram.
Road Logistics India.Image credit: Irfan
The growth of Logistics
Cost of logistics in India is higher as compared with the US and China, and an Assocham report suggests India can save close to $50 billion if logistics costs drop to 9 percent of GDP from 13 percent now. This, in turn, would also bring down prices of products.
A report in the Mint newspaper, which analysed data from the Centre for Monitoring Indian Economy’s industrial base, says that between 2010 and 2015, all logistics subsectors saw a decline in profitability. The average operating efficiency during the period was seven percent for the road transport sector, and 20 percent for the storage sector.
In 2017-18, the government, initiated several public-private infrastructure projects with major players which has led to faster execution, creation of a stable ecosystem, and a boost to the job market, and the economy.
“The government has been bullish on reforming the logistics and infrastructure sector, which was evident from the 10 percent increase in transport infrastructure budget allocation in 2017-18. In addition, funds were allocated for the Sagarmala project, to build multimodal logistics parks, and to develop coastal roadways,” explains Nishith.
He says these measures gave a boost to the shipping industry, and would lead to around 20 percent year-on-year growth.
Rail logistics sector.Image credit: Irfan
GST impact
The logistics sector has seen a paradigm shift post implementation of the GST as various indirect taxes made way for the unified tax. In fact, the indirect tax regime changed the way companies strategised their supply chain operations as they did not need to worry about local taxes like Octroi. Citing an example, Nishith says Nagpur saw land prices skyrocket as warehousing opportunities opened up following the scrapping of local taxes.
Also, with the GST, there was consolidation of warehouses across clients, resulting in fewer full truck load stock transfers, and increased direct billing from a central warehouse to the customer. “This has resulted in a direct growth in lower truck load business opportunities for Emiza,” says Ajay.
The last budget also allowed 100 percent foreign direct investment in warehousing, making it easier for foreign players to comply with the single point GST norms.
“In the GST regime, it is imperative for every stakeholder in the ecosystem to upload tax. If one does not, the party that has sold the goods forces the receiving party to do so immediately, or else faces the burden of not getting input tax credit,” says Nikhil Rungta, Managing Director of Intuit India.
He says the indirect tax regime has made every member in the chain more accountable to pay tax.
Nishith believes the efficiency of the supply chain can be improved by as much as 30 percent due to the goods and services tax going forward. Locus, for instance, has helped several major corporations save 10-25 percent by applying innovative, technological solutions to the supply chain.
Companies, however, negotiate margins with their sales channels, including e-commerce channels, as margins fall under the GST.
Vikas Lachhwani, Co-founder of MCaffeine, a skincare brand, says:
“The first quarter showed us that many brands lost money because a lot of the goods were being sold under pre-GST rates. We renegotiated contracts again with e-commerce companies.” He adds that with GST, he is still bullish because Indian domestic consumption is on the rise, and capturing tax at each source is essential for growth of the economy.
The FY19 budget still needs to address some issues around GST. Also, there is a lot of confusion about transportation companies operating as General Transport Agencies (GTA) or as a courier service, and therefore the applicability of GST on them.
“Companies that operate as a GTA do not get the benefit of offsetting GST expenses incurred by them, thereby increasing their costs. To me, if the government came up with a single tax GST tax structure for GTAs like 5 percent, and allowed us to collect that from our clients and deposit it on their behalf, it would allow us to offset the GST charged to us. If the upcoming budget can address some of these concerns, it could be a game changer for the sector,” says Ajay.
(With inputs from Vishal Krishna)
Source : https://yourstory.com/
Sunday 26 November 2017
Why these 5 industries will soon pick virtual assistants instead of hiring you
India may have been slow to catch up with the world when it comes to AI services, but the role of VPA technology is going to be significant with even Future Group betting big on digital retail 3.0.
Life seems to be moving in the direction of the cloud. Until now, the Gods in the clouds guided us; now, the cloud and data, which know everything about us, are our guiding light.
Microsoft Azure, Amazon Web Services, and the Google Cloud, packed with data on every human interaction, are the new Gods these days.
No wonder services are being built on top of their Artificial Intelligence (AI) platforms. From shopping to dating, from interactions with friends to business conversations, everything is culminating into an era where algorithms will make suggestions to the individual and the CEO about building a personality and a company.
The role of virtual private assistant technology will be significant going forward.
Kishore Biyani, the Chairman of Future Group, announced a new strategy where there will be digital integration with 350 stores in grocery. The group plans to eventually roll out virtual personal assistant tech in 10,000 stores in five years.
“We will use everything from chat apps to machine learning for a complete digital retail experience,” he says. This $4.4 billion dollar company isn’t the only one betting on virtual private assistant (VPA) technology; there is a host of others too. The companies that will build for large enterprises will be IT Services companies like Infosys, Mindtree and Wipro. But, these companies have large revenues from the US and will focus on that market only.
With Kishore taking this bet, the opportunity to build such services for the Indian market is wide open to startups. However, there aren’t many stellar examples of VPA implementations from startups with large companies. Everyone claims to build a chatbot, but, a chatbot is not a VPA. Companies using basic conversational assistants include Yellow Messenger, Marvin.AI, Morph.AI and Avysh.com.
Naganand Doraswamy, Founder of IdeaSpring Capital, says, “Today, literally every startup and mid-sized company claims to be an AI startup and gives the chatbot argument. But they have no clue about Deep Learning, Machine Learning and AI. They need to figure out where they stand in terms of tech and then work on a business model.”
He adds that today, large product companies like Amazon and Apple, which understand how consumers and technology work, are game for VPAs.
These virtual private assistants are not robots like the ones in Asimov’s fictional Robot Series; they are just a stepping stone to a dynamic machine-and-human interaction.
How does VPA work?
The VPA is an algorithm that tracks data and figures out your likes and dislikes, and then answers questions on a chat or voice platform. It is able to make suggestions based on historical data. Engineers today are using the power of the cloud (compute and storage), mobile apps, interactive web and search modules to target customers on the go.
Atul Jalan, Founder of Manthan, says: “In the future, thanks to digital data, software will know more about the individual and will predict possibilities that are accurate.” He adds that data is the “future of the world” with everyone openly sharing data with Google, Facebook and all the apps that are installed on their phones.
All engineering students must prepare for this AI revolution by understanding data coming from corporations. For that, however, there needs to be a massive overhaul of industry and academia engagement. Karnataka has taken a step ahead in setting up a centre of excellence for AI, but there needs to a unified effort across the country to study the impact of these AI-based Algorithms.
With these clouds, technology companies can now help enterprises use data to tailor-make campaigns for customers. Gone will be the days when data was in silos and the customer was treated as part of a whole. Today, the customers can be made to feel special although they will – very subtly – still remain part of a whole as corporations will focus on new tailor-made campaigns to increase top lines and bottom lines. Such campaigns will be triggered by VPAs, AI-powered software, which plugs into the CRM in the BFSI and retail scenarios, and Hospital Information Systems. VPAs are being piloted in several industries, including logistics, brick-and-mortar retail, healthcare, banks and manufacturing.
We list down the five industries that will use and be augmented by the presence of VPAs in the near future:
Retail: In Bengaluru, Mindtree and Manthan are building their versions of VPA for retailers to help customers make informed shopping decisions. The objective is to inform the individual about the product and influence him/her to buy it. Say, an individual likes a “crunchy” milkshake, the VPA engine will figure out what could be the possible purchase in the store. It may suggest “cookies” or even a “freshly baked pizza at the gourmet bakery”. The only teams that have to be dynamic are store associates and marketing teams serving these real-time offers. All the customer has to do is walk into the store, turn on the retailer’s app and use the voice or text-based assistant. These are high level chatbots that have been built using natural language processing techniques.
N S Parthasarathy, Executive Vice Chairman of Mindtree, says: “Soon, the customers will want technology to provide outcomes and we have to build these AI-based assistants.”
These virtual assistants help retailers improve loyalty with tailor-made campaigns. They also help store managers make suggestions to shoppers at the aisle.
Manufacturing: VPAs are part of connected factories in Germany where every machine on the shop floor becomes a dashboard on an app. The VPA tracks the performance of all the machines, predicts failures and prescribes the type of maintenance required. The factory manager asks it questions or types out queries to figure out the tasks for each machine and how to rest them when the production cycle changes based on market demand. Recently, TCS tied up with Rolls Royce to build an IoT module with AI, Deep Learning and Machine Learning. In this setting, VPAs will be provided to plant managers and clients (businesses that own planes that run on Rolls-Royce engines) to figure out areas where engine parts may be worn out and how to fix them.
Ben Story, Strategic Marketing Director at Rolls Royce, says, “This reduces the time to market and brings down the cost.”
The company, along with TCS, will also work with startups and other firms to figure out Machine Learning and Artificial Intelligence synergies in making real-time data for end-users of Rolls Royce engines.
“We are using data to discover component life time rate based on usage and to reduce the cost of ownership for clients,” Ben says.
The same applications can work in the automobile industry. This technology will be part of a $7 billion technology upgrade opportunity in Indian manufacturing by 2020, industry experts say.
Logistics: This industry, which is $200 billion in market size, is low on tech and awaiting disruption. Big investments are being made by the likes of Amazon and Flipkart in warehouses. The easiest application that can be provided to truckers is a VPA to understand contracts, find business and also figure out delivery routes.
LOBB, a real-time delivery truck discovery company, says truckers need technologies that can help them understand delivery schedule and also speak to a bot to understand truck maintenance.
Jayaram Raju, Co-founder of LOBB, says: “AI is going to disrupt trucking with predictive maintenance and will also help truckers manage the client’s cargo better with virtual assistants.”
In warehouses, managers can get schedules explained to them by the VPA. Movement of bins and crates can be predicted based on the scheduled ship-ins and ship-outs.
Healthcare: VPAs can be used by doctors to dynamically understand patient history while patients can use them to better engage with hospitals and insurance companies. Say, for example, a patient wants to consult a doctor; the entire appointment is made through a VPA. But the software will pull all your insurance details and plug it to the insurance company and the doctor. The doctor can use the VPA to get dashboards on his treatments and appointments. The VPA will tell the doctor that the next patients have put down on the app that they are suffering from acute indigestion or burns. The VPA will create a dashboard of incidents and remedies/therapies suggested over a period of time. This information can be plugged to the hospital ERP to manage the time of its surgeons, specialists and hospital beds better.
Professor S Sadagopan, Director of IIIT-B, says, “The future is going conversational with real-time data and this benefits healthcare. AI can decide whether the case needs a senior surgeon at the operation table; in 95 percent, of the cases you don’t need a senior surgeon’s presence.”
Banks: There is a reason why VPAs are needed in banks, which are behemoths with large staff strength and massive paperwork and duplication of work.
Badrinath Rao, CEO of Cattleya Technosys, says, “Banks are reducing the size of their branches and opening several virtual bank networks. One can open an account with a virtual agent and you really don’t need people to man the centre.” Cattleya is an IoT company working on automating processes in banks.
SBI, for example, spends Rs 800 crore every year to just manage JanDan accounts. Imagine VPAs cutting out the paperwork and making bank staff efficient. But for this to happen, banks must integrate their consumer-facing technology on to this form of tech. SBI is investing in several new technologies to make banking go digital. The challenge here is of regulations. But what if a conversational app helped a person open an account or buy an insurance policy from the bank channel? This would be faster, could be done out of any region, and the customer would not need to visit the branch.
According to Cognizant, the global market for smart virtual personal assistants (SVPAs), or chat bots, is growing exponentially. What was valued at $113 million just two years ago, according to Transparency Market Research, is expected to reach nearly a billion by 2024. Furthermore, adoption of popular virtual assistants such as Apple Siri, Amazon Alexa, Google Home and Microsoft Cortana is rapidly approaching 100 million combined users. These offerings, however, have predominantly appeared in the consumer space for straightforward activities such as booking movie tickets, identifying restaurants, providing sports and weather updates, creating event reminders, texting and calling friends, or playing music.
In the next step, enterprises come into the picture. SVPAs could schedule meetings, follow up on work-in-progress activities, and carry out daily tasks such as filing timesheets, providing employee instruction, and more. This could lead to significant enhancements to employee collaboration, satisfaction, and ultimately significant cost savings for organisations. In Cognizant’s view, SVPAs are an enterprise disruption waiting to happen.
The LOBB Story: Bringing Digital experience and efficiency in to Logistics
A year ago
Bhaskar Bonepalli, a veteran agent of the logistics industry, would be troubled
with calls throughout the day to arrange trucks to meet requirements of
operators. He often had to call these truckers and head to the truck stop in
Hoskote, where he is located, to arrange trips. Entered LOBB, the two year old startup, which went ahead and took away the headache of physical discovery of business from operators. Today Bhaskar sits at home and he knows how many logistics companies or operators require trucks and he absolutely knows how many trucks in his network are available. LOBB is an acronym for Logistics Business to Business. It is a technology company that brings truckers, agents,logistics companies and businesses all under one platform where there is seamless integration of business and flow of money.
The logistics company puts in its request on LOBB and this
information is available to agents who immediately provision a certain numbers
of trucks. From there on LOBB pays the truckers an advance and provide them
details of the shipment and the destination for dropping the cargo off. This
system makes everyone in the ecosystem agree upon a price and service. The
trucker gets his money and also has a diesel card, which allows him to redeem
for fuel in any HP bunk across PAN India. Being a powerful tool it
has now more than 10000 truckers on its platform along with more than 200 large
companies integrated on the platform. “My asset utilisation has increased thanks to the company,”
says Bhaskar Bonepalli, who owns Bhavya Roadlines.
What can LOBB do for
you?
It is estimated that India spends 13 percent of its GDP on
logistics. This is a very high number because globally in a developing economy
the logistics cost is around 8 percent. The Indian number is very high because
of the lack of transparency in the ecosystem.
Shivkumar, Head of
South Region, for Inland Logistics in Chennai says that with LOBB’s app there
has been absolute price transparency and availability of business. “I always
found trucks serving us through their ecosystem and they help a company like us
who are in constant need of trucks to move items,” he says. The availability on
a real time basis is made possible only because there are a number of agents
who have taken to this system because their asset utilisation has increased and
they want to receive money digitally.
Thingal, the manager of fleet company VR links, agrees with
Bhaskar. He says “Truck utilisation, transparency and digital payments are key
features of LOBB. They are a very disruptive company”
Today LOBB has all its agents receiving money through NPCI’s
BHIM app, which makes the
system accountable. If you ask the LOBB founder Venu Kondur and Jayaram Raju
about their journey to make this system go digital, they will tell you that
they addressed the problem by figuring out the pain points in the entire
ecosystem. The pain points were:
For the trucker: It was to increase asset utilization.
For the Agent: It was to increase revenues with asset
utilization.
For the operators: It was to provide timely trucks.
For companies: It was to ensure price efficiency and digital
transparency across the system.
“We had to integrate all these processes on to our system,”
says Jayaram Raju. He says that they have even been able to decrease graft in
the system. With LOBB
putting the entire system together there is absolute information symmetry.
Today the company has grown 20X in last 10 months and is already making a dent in the logistics ecosystem in trucking centres
across south India.
With 90 percent of Indian logistics being disorganised, LOBB
is definitely a refreshing model that can map consumption and
demand through trucking trips, and has the potential to scale up soon.
Now, only time will tell if the truckers and agents take to using this
technology.
Monday 6 November 2017
One Year after Demonetisation, 100% Cashless Transactions@LOBB
SMBs exorcise the demonetisation demon, make a slow comeback
A year ago, SMBs were reeling under demonetisation. However, a normal monsoon and with the hope of the RBI lowering interest rates, SMBs expect higher consumption and a rise in industrial production to weather the storm.
When Prime Minister Narendra Modi made his surprise televised address a few days after Diwali last year, Indians were caught completely unawares. The Indian government said demonetisation was a move to crack down on black money and tax evasion, but it made life very tough for the common man. The decision that Rs 500 and Rs 1,000 notes would cease to be legal tender led to a situation where one billion Indians had to make do with very little money for at least five months.
The RBI, in its annual report, said Rs 15.28 lakh of these high-value bills had come back to the system and that this represented close to 98.75 percent of the total money in circulation in such bills.
While the government says it has been successful in flushing out fake currency with this move, what has been the socio-economic impact of demonetisation?
Chandra Mohan Grover, Co-founder of IBSFintech, says: “We must understand two things here. It affected the economy in the short run and impacted the common man.” IBSFintech works with banks and corporates to manage their treasury management systems.
“But,” he adds, “It’s a decision that sent a strong signal to the world that India was heading towards increasing the tax net and focus on digitisation.”
So what impact did it have on the common man and small stores or mom-and-pop retailers?
(Photo: K Venkatesh)
Saleem Mohammed, a small department store retailer in Vasanthnagar, says, “We did not suffer as much as our distributors did.” He says he offered people credit, customers began to purchase in small ticket sizes, FMCG companies began discounting stock and distributor margins were impacted.
According to Ernst&Young, there are 600,000 distributors and 12 million mom-and-pop retailers in India.
The small and medium-sized enterprise (SME) sector is a big chunk of the Indian economy, contributing to 8 percent of the GDP while employing more than 80 million people year on year.
How did demonetisation affect distributors?
The major mistake that distributors made last year during demonetisation was that they put all their money back into the banking system.
Lalit Bhise, co-founder of Mobisy Technologies, a technology platform that works with 25,000 distributors, says: “Although it was a good thing that they put back cash in the system, they ordered a lot more in the same period and could not sell product, which became the issue. It was a pure case of inventory being built up and they struggled for four months.”
The impact on business was in the margins. The distributor ecosystem makes a net margin of 1 percent and a gross margin of not more than 3 percent. Without cash, several of them began to wait out with their savings and this affected several distributors in offloading stock at minute margins.
Demonetisation and long queues. (Photo: K Venkatesh)
Details provided by SnapBizz, which collected data from over 2000 small stores, reveal the impact on consumer offtake:
There was a 25 percent decline in the offtake by consumers in 2 weeks’ post demonetisation.
Some cities were affected more than others. Mumbai and Delhi saw a sharp decline (to the tune of 31 percent) vs Bangalore that saw a decline to the tune of 18 percent.
Non-essentials like cigarettes, chocolates, dry fruits, baking/ dessert prep, soft drinks and juice concentrates saw a sharp decline in the range of 16 percent to 33 percent.
Categories like baby food, masala, staples, oral care and haircare did not see any impact on sales/number of bills.
The following categories saw an increased instance (to the tune of 11 percent) in favour of big pack purchases: Staples like cooking oil, dals and pulses, flour, sooji, grains, tea and salt; personal care items like liquid soaps, mouthwash, toothpastes and depilatory aids.
There was an increased instance of consumers buying smaller packs for categories such as cleaning accessories, creams and lotions, desserts, face wash and health drinks (personal care items). The percentage shift from large packs to small packs was 23 percent.
Few categories saw purchases moving from branded products to unbranded/loose items. This could be due to retailers giving credit and hence pushing high-margin unbranded/loose items. These include
Snacks – 12 percent
Cooking oil – 8 percent
Dals and pulses – 23 percent
Masalas – 11 percent
Tea – 24 percent
Deodorants, pickles, noodles/pasta, hair colours had very low offtake during this time period and this was consistent across cities.
The current scenario
Rahul Garg, the founder of Moglix, a B2B e-commerce store that works with medium-sized businesses, says that the cash economy was hit for three months. “Several wholesalers who had parallel books were impacted. The good part is we have been able to onboard several of them to go digital and most importantly the government made a strong policy that evasion of tax is no longer going to be easy,” says Rahul Garg. He adds that demonetisation was a short-term problem and that it hurt the economy for two quarters. “Along with the GST there has been a push to go digital and it impacts us all in the short run. But, it is a long-term vision for tax reforms in the country,” he says.
Almost a year after demonetisation, how are things in shops and stores, and with consumers?
The median of number of items purchased in a basket in both digital payment and cash stores has returned to normalcy.
The basket size immediately after demonetisation had declined by 16 percent and fell further by 19 percent in the week after for stores using only cash mode of sales. However, by the third week, the basket size grew by 6 percent and returned to normalcy by March 2018.
The median basket size in stores enabled for digital transactions saw a six percent decline and 11 percent decline in the two weeks after demonetisation. In the current week, the trend remains the same with a one percent change.
There seems to be more cash circulating in the market and being spent at stores now.
Jayaram Raju K, the founder of LOBB, a tech platform for truckers and brands, says: “The good part is that several B2B companies such as logistics, which supply to the wholesale retailing industry, managed to go digital.”
The logistics industry is 90 percent cash-driven and demonetisation had an impact on the lives of the drivers. It took six months for the logistics industry to bounce back, since consumption began to grow since April 2017. However, truckers began to benefit as companies started transferring money digitally.
“Today we have ensured 100 percent of our transactions are digital,” Jayaram says.
A cashless economy
Lobb has grown from just $0.5 million annual rate of return in December to $12 million ARR in 10 months. Jayaram adds that transporters and truckers are able to transact using BHIM (UPI) and net banking smoothly.
“This has improved overall efficiency in the system,” Jayaram says.
Overall, the logistics industry has turned to a cashless economy. Drivers are carrying ATM cards and smartphones to do digital transactions, and are using FASTAG technology for Digital Toll Payments.
Credit rating agency Crisil in a report said the economy slowed to 5.7 percent because of demonetisation, but was going to bounce back because of good monsoons and consumption remaining steady. Crisil said a normal monsoon, lower interest rates (expected because of excess liquidity in the banking system) and implementation of the Seventh Pay Commission will increase consumption.
Industrial production has grown by 1.17 percent when compared to a negative growth in December 2016.
With these bright portents, India may recover from the demonetisation and GST setbacks in the coming quarters and tread the growth path.
