UPI has revolutionised how Indians pay; but has it pulled the candy industry down?

Everyone now accepts UPI, from cab drivers to valet parking, mall access to toll payments, electricity bills to LPG booking. Even our favourite snack corners accept UPI payments, which may seem unbelievable.

Not everyone, though, is pleased about it. On a totally different note, many people think that the rise and expansion of UPI has been hard on the candy manufacturers. Do you remember when you used to get candy instead of money? Yes, that is what we are discussing.

Abhishek Patil, the founder of GrowthX, has made the comparison between candy and UPI as forms of payment on LinkedIn. Abhishek claims that practically all major businesses in the candy industry, including Mondelez International, Mars, Nestle, Perfetti Van Melle, Parle Agro Pvt Ltd, and ITC Limited, reported astounding growth and future prospects in the early 2010s. But, since UPI arrived, the majority of these brands have reported a sharp drop in toffee sales.

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He even asserted that Hershey’s, one of the largest chocolate and toffee producers in the world, has stated that India is one of the markets most negatively impacted by the post-COVID era, which has hurt their expansion plan.

Before the introduction of UPI, store owners would exchange spare cash for toffees, a transaction that wasn’t taking place the other way around. According to research, many consumers acknowledged that these tiny sums over time did end up becoming big sums of money, Patil said All of this came to an end with UPI as people have started paying the precise amount due without the option to negotiate, consuming the daily toffee sales in the process, he added.

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Patil even attributed the increased use of UPIs across the country to the pandemic. Everyone wanted to use contactless payments because the majority of the crowd was terrified about the pandemic. Additionally, this led to a push toward electronic payments, and toffee was no longer an option, Patil added. Finance items would never have crossed the minds of any toffee manufacturer as a rival. Toffees were cash substitutes and UPI replaced this requirement and behaviour, according to him.

According to CapitalMind CEO Deepak Shenoy, Patiil’s take is quite misleading. He does not believe that UPI is ruining the toffee industry. According to Lotte India’s annual report, the closure of schools cost them money in FY21 while sales were booming in FY22, he added.

(With ANI inputs)