Indias demonetization drive has been widely debated ever since the governments surprise announcement in early november 2016 that it would invalidate billions of 500. Thus it becomes necessary to study the impact of demonetization on e commerce industry. The very real impact of indias demonetization adam. Demonetization is the act of stripping a currency unit of its status as legal tender. Sweta singhal 2017 carried out research on demonetization and e banking in india. The decision has definitely hurt the conversion rate optimization practices in a big way. To study the positive impact of demonetization on ecommerce industry. Offline retailers focusing on maintaining store traffic. The main purpose of this is to give a glance of demonetization and its effects on ecommerce. As ecommerce companies are spending huge money across our country, they are experiencing the remarkable growth on online markets. A conceptual study on demonetization and its effect on ecommerce. Impact of demonetization ijbm international journal of business.
Considering that this topic is the subject of much debate and discussion at the moment, this article attempts to demystify the whole issue by providing some pointers as well as explaining the stakes and the concepts in ordinary language. The industry consensus is that growth is at an inflection point. Traditional commerce vs ecommerce and impact of demonetization on. According to this report, digital payments have seen a whopping surge of 271 per cent in the very first month following demonetization.
The main focus of the study is to understand and analyze the effect of demonetization on consumers frequency of buying product and consumers mode of payment for online shopping post demonetization. Because with cash transactions facing a reduction, alternative forms of payment will see a surge in demand. Minister narendra modi has not only impacted ecommerce but at the same time has an impact on the consumers. To study the challenges facing by the ecommerce industry. Let us take a quick look at the various business sectors that are affected by this demonetization move. Impact of demonetization on consumer behavior towards. This paper concludes with the awareness level among the people for adopting esystem to get back. Merchant discount rate is the fee paid by a merchant to a bank for accepting digital payments. Special issue published in international journal of trend. Impact of demonitization on middle and lower income group alameen arts, science and commerce college page 1 chapter1 introduction 1. There are several different reports which forecasted the effects of demonetization on ecommerce and use of mobile wallets.
However, the economic strategies in the country can impact growth on business. Impact of demonetisation on ecommerce deccan chronicle. Elaborating on the conversation here is a summary of possible impacts. Like the one where it was found that demonetization will increase the digitization of payments for electronic commerce companies or cashondelivery demand would reduce businesswire, 2016. Demonetization had negative impact for a short duration on indian financial markets. Impact of demonetization on profitability of banks banks net profits essentially reflect the difference between interest earned on loans and advances and investments, and interest paid on deposits and borrowings, adjusted for operating costs and provisions.
The move is part of the budget announcement in july. This paper elucidates the impact of such a move on the availability of credit, spending, level of activity and government finances. In india, cash on delivery is the most preferred payment method, accumulating 75 % of the eretail activities. Much of the payment for ecommerce sites is done through cash on delivery, which had now come to suffer a huge blow.
The government claimed that the demonetisation was an effort to stop counterfeiting of the current banknotes allegedly used for funding terrorism, as well as a crack. The increasing adoption of the bharat bill payment system bbps, bharat qr and interoperability guidelines for ppi players will lend a. About 70% of indias ecommerce market is travel related. Effects of demonetization on digital payment systems in india. Traditional commerce vs ecommerce and impact of demonetization on ecommerce dinesh chand gupta1, prof. What is demonetization the term demonetization is not new to the indian economy. This paper specifically outlines the effective implementation of demonetization decision. Pdf affect of demonetization on ecommerce researchgate. Reduce corruption 80% of the payment done by the people is cash on delivery which increase the rate of corruption through paying black money, but after the demonetization above 50% payments are done though e banking.
A study on healthcare and pharmaceutical industry dr. The centres move of demonetization will augur well for the mcommerce industry in the country and most of the retail commerce will shift to mobile in the near future, says a. Reduce corruption 80% of the payment done by the people is cash on delivery which increase the rate of corruption through paying black money, but after the demonetization above 50% payments are done though ebanking. Economic impact on different sectors in india abstract demonetization refers to change of currency by a government to curb illegal activities and transactions. Further, the impact of such a move would vary depending on the extent to which the government decides to remonetise. Demonetization pdf pros and cons of demonetization rs 500,hello friends welcome to. But these notes were demonetized in january 1946 and again in january 1978, according to rbi data. Almost all the ecommerce websites suffered major losses in the event of demonetization. The move will apply to all companies with a turnover of rs 50 crore or more. India is one of the key growth countries when it comes to ecommerce but it is still.
Ashoke kumar sarkar 1, debasmita dutta 2 1central university of jharkhand, ranchi, india 2research scholar, central university of jharkhand, ranchi, india abstract it was the eve of 8th november 2016, when an. Key words demonetization, cashless, economy, ecommerce, emarketers. Now lets analyze the political, economic and social impact of the demonetization in detail. How is demonetization affecting the ecommerce and other. The biggest companies which have got a hit are paytm, amazon, flipkart. With ecommerce expansion at a hopeful stage, the markets will reach their heights of improvement. This is the exchange i had with avlesh who is ceo of the leading customer engagement tool webengage used by many ecommerce companies in india.
Here we are sharing some important points about demonetization pdf pros and cons of demonetization rs 500. Although the government was primarily targeting wealth tax evaders in an attempt to redistribute income, the poor, and particularly women and those living rurally. Snapdeal, another large indian ecommerce company, grew by 500 percent between 2012 and 20 and posted a gmv of usd 2. On november 8th when pm narendra modi suddenly announced demonetisationwhole country was thrown into turmoil. This paper deals with impact of demonetization on economy. Despite the impressive numbers, sk epticism around ecommerce is still alive and for good reason.
To find out the effect of demonetization on e commerce. In india, cash on delivery is the most preferred payment method, accumulating 75% of the eretail activities. What is the impact of demonetization on ecommerce and. The purpose of this study is to know about the demonetization and its revolutionary effects in the field of ecommerce and technology.
And this is symptomatic of how ecommerce is getting impacted by demonetization. Impacts of demonetization on ecommerce tquanta technologies. One of the most significant changes in the payments landscape is the push towards interoperability, with instruments such as upi allowing transfers between 55 banks, independent of the acquirer payment service provider mobile app. The main aim of the study is to understand and analyze the effect of demonetization on.
For online retailers cod involves additional cost and. Modi has impacted ecommerce and at the same times it has an impact on the consumers and their shopping behaviour through online shopping. While the unprecedented action taken by the prime minister narendra. But he said that the real impact will be shown in future. The overall growth of ecommerce during the last quarter of 2016 downgraded and many ecommerce players, startups and other small businesses saw a heavy blow because of this move.
India initiated its controversial plan of demonetization on 8th nov 2016, by making the rs 500 notes not as legal tender. Effect of demonetization on ecommerce for short term is negative but in long term it may be very positive of growth of ecommerce industry in indian. Thus it becomes necessary to study the impact of demonetization on e commerce industry and the purchasing habits of the people. This article examines the impact of demonetization on the indian economy from multiple perspectives. For ecommerce companies such as amazon, flipkart, snapdeal etc. The article explores the economic and social impact of ecommerce. Modi has impacted ecommerce and at the same times it has an impact on the consumers. The opposite of remonetisationin which a form of payment is restored as legal tender. Demonetization and its impact on the indian economy. Research design the present study is primarily based on secondary data, and to understand the problems and. Impact of demonetization on world economy demonetization will certainly have effects on world economics. This paper explores effect of demonetization on ecommerce industry in indian. Impact of demonetization on online shopping in 2017.
The highest denomination note ever printed by the reserve bank of india was the rs 10,000 note in 1938 and again in 1954. One of the long term benefits for the ecommerce industry is reduction in payments via cod. Demonetization pdf pros and cons of demonetization rs. Generally, the leading ecommerce companies register returns of about 15%, but has doubled up ever since demonetization took effect, with most cancellations arising out of cash on delivery orders due to the growing reluctance of customers to give out cash. Demonetization is the process of stripping or removing a currency unit of its status as legal. It studies the positive impacts of the demonetization on indian economy. Demonetization impact on ecommerce after one year it has been more than a. The number of customers of the company has increased from one million users to 2.