Refrain in markets: Sales sluggish, business down even a month after demonetisation

A few kilometres away, at the garment trading hub in Karol Bagh, where once stacks of cardboard packing material lay strewn, there is now a lull.

Written by Sweta Dutta | New Delhi | Published:December 10, 2016 4:43 am
759-cardboard In Sadar Bazar, traders say they are not happy with the way demonetisation has been implemented. Express Photo by Abhinav Saha.

Threading through the dark, narrow alleys in the otherwise bustling wholesale automobile spare parts market in Kashmere Gate, Amit Gupta, a dealer, walks into his dingy, airless shop, where stacks of cardboard boxes lie unused at the door.

“These are lanes where one had to squeeze their way in. The market used to bustle with customers all year long and look at it now. Thanks to demonetisation, it stands deserted. We have lost business by over 80 per cent,” Gupta told The Indian Express between attending calls on his landline, telling customers repeatedly to either get cash or wait till cheques are cleared for the ‘material’ to be dispatched. “Most of the shops here are tucked in nooks and corners inside the alleys and there is no network on either my phone or the customers’. How does one use Paytm?” he said.

A month after demonetisation of Rs 500 and Rs 1,000 notes were announced, wholesale traders in the capital — be it electronics, garments or automobile spare parts — continue to report sluggish sales. With a small profit margin of over 2 per cent, traders point out that the transaction costs on Point of Sale (PoS) machines eat into their profits. Some traders, who have shops in Chandni Chowk, Sadar Bazar, Chawri Bazar and Kashmere Gate, complain of either trouble in operating Paytm or difficulty in getting a PoS machine. Traders are now warning of mass retrenchments as their business show no signs of looking up.

Gupta had enquired for a PoS machine a few days ago and was told by the bank that there is a serious shortage, and that he will have to wait for at least another two weeks. “Several of us in this market have approached banks to get a PoS machine and were told there is a shortage. Also, we hardly have any customers who want to pay by card. So I am not even sure if going through the trouble of getting a machine is worth it. We will later have to pay a rental and there will be no business either. We had a few customers wanting to pay through Paytm but for that we will first have to get Wi-Fi for better net connectivity,” Gupta complained. “Small payments, say, to the loaders, have to be made in cash anyway.”

A few kilometres away, at the garment trading hub in Karol Bagh, where once stacks of cardboard packing material lay strewn, there is now a lull. “No one wants to go shopping in such desperate times when they would rather worry about buying ration first. As for retailers, several factories in small towns like Kanpur — where we had large scale buyers — have shut down due to demonetisation. If this cash crunch goes on, we will have to retrench our staff in the next few days,” said Ramesh Ahuja, president of Readymade Garment and Cloth Dealers Welfare Association and also a dealer in Karol Bagh.

“We (traders) support the decision of demonetisation but not its implementation. We have been swatting flies in our shops for the past month. Things are just as bad as they were soon after demonetisation was announced. We are ready to get PoS machines or Paytm but first let the customers show up. Right now, the only business we are able to transact is through cheque or in some petty cash. How do I pay my staff?” he added.

Mahendra Agrawal, president of the All Delhi Computer Traders Association and a dealer in Nehru Place, said, “This is Asia’s biggest computer market and is the worst hit due to demonetisation. We have suffered about 90 per cent losses since November 8. Paytm has a cap of Rs 20,000 transaction per month. That is nothing in terms of computer sales. As for PoS machines, the transaction charges mean more expenses for us. Who is benefiting from this?”

He added, “The entire electronics market in Nehru Place has 20,500 shops with 1.5 lakh shopkeepers and staff working here. There have already been several job cuts and the situation is likely to get worse in the coming days. We will have to ask more of our boys in the shops to leave.”

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