India’s smallest businesses epitomise the rise of a new, more efficient economy
We are seeing the rise of a new, more efficient, more digital and more scalable India. An example of this is the local chai vendor who has set up shop just outside our office in the Andheri East suburb of Mumbai. A year ago, when the tea stall started business, the said vendor was selling 500-600 cups per day. Today, the vendor sells around 7,000-8,000 cups of beverages per day i.e., 15x growth in one year. Spotting a gap in the market, a cigarette vendor set up shop next to the tea vendor, four months ago. From clocking revenues per day of Rs 1,000/day in his first few weeks, the cigarette vendor now generates Rs 8,000 per day.
Both of these vendors receive the vast majority of their payments via the Unified Payments Interface (UPI), a real-time mobile-based payment system. According to them, when they started their tea and cigarette stalls hardly 20-30% of people used to pay via UPI. Today, almost 70-80% of their customers pay via UPI (the remainder still use cash). According to the National Payments Corporation of India (NPCI), peer-to-merchant (P2M) UPI transactions recorded 138% YOY growth in November 2022 – see the exhibit below which shows that
— source marcellus.in | Nandita Rajhansa, Saurabh Mukherjea | 12/Jan/2023