Demonetisation Impact: 90% traders experiencing business decline

November 25, 2016, New Delhi, India: 90% of traders and small retailers across India are experiencing a decline in their business ranging from 0-90%. These were the findings of LocalCircles survey in which over 8000 citizens participated from across 200 cities in India.

Citizens were requested to visit their local market, speak to traders and small retailers and only then respond to the survey question. Based on inputs received from citizens, approximately 16% traders across the country are experiencing sales declines in the range of 60-90%. These include jewellers, furniture, sanitaryware and traders dealing in other discretionary items. Approximately 28% traders are experiencing declines of 30-60% and those in this category include traders of automobile, computers, mobile phones, garments, etc. According to the poll, approximately 46% traders are experiencing sales declines in the range of 0-30% and these include general stores, prepaid recharge and those trading many other essential use items.

Per feedback from citizens, traders and small retailers are struggling for two primary reasons which are cash crunch and removal of black money from the system. Once the cash becomes available in the system most believe that 60-70% of the lost consumer demand and lost sales will come back. However the remaining 30-40% consumer demand which were the purchases from black money are permanently lost. Hence, their sales and earnings will now be lower in the short as well as medium term.

In a related survey conducted by LocalCircles on consumer spending, approximately 20% consumers plan to spend less in the coming weeks due to uncertainty post demonetisation of the old currency. Another 30% consumers say they see themselves spending less in the coming weeks due to the limited availability of cash. 47% consumers said they plan to spend the same as pre demonetisation. 3% did not have an opinion.

Approximately 8000 citizens participated in this survey from across 200 locations in India. 42% participants were from Tier 1 cities, 30% were from Tier 2 cities and 28% from Tier 3 cities and rural areas.