By Amit Sharma, Assistant Manager, Industry Intelligence Practice, CMR
For Suresh, the owner of Suresh Infotech, demonetisation not only took a toll on his business, but took his life, when he couldn’t cope up with the move and committed suicide on account of heavy inventory pile-up.
Initially, just after demonetisation, channel partners sold laptop and desktop in good numbers as buyers had old currency, which needed to be wiped out from the system and so, the month of November, went off quite smoothly. Post November, the demand got affected by 30-40%.
However, for some the business was as usual, thanks to online sales. Tier-1 and Tier-2 were not affected significantly, but Tier-3 cities were impacted the most as they deal directly in cash.
For people like Suresh, demonetisation came in a bad taste as they had huge stock in hand and clearing them was becoming almost impossible.
In fact, those channel partners who were more dependent on cash flow or duplicate billings suffered a lot. In this period, some partners even exited the market.
Almost all national distributors increased credit period from 25-30 days to 45-50 days. Online business went up in this time with more finance /zero finance facility provided to customers from various vendors, banks, financing company, etc
In a nutshell, we can say demonetisation was a mixed bag for channels, with some making profit out of it, while some yielding losses. After all, someone’s gain is always someone’s loss.