Card spends show pent-up demand for durables, phones

Pine Labs, which processes nearly a fourth of in-store card transactions in India, has said that use of this payment channel during Lockdown 4.0 — outside Delhi NCR and Mumbai — shows that there is a pent-up demand.

According to the payments company, the highest growth has been in the white goods/consumer durables segment and mobile phones. In these two categories, daily average transactions in the second half of May (after the third phase of the lockdown was over) have been 110 percent of the number for January.

While transaction numbers were much lower, the average size of the transaction was larger. Also, the retail gross transaction value in May is back to the pre-lockdown average in India, if Mumbai and Delhi were excluded. Transactions in consumer durable stores were low in Mumbai, where it was only 23% and 31 percent of pre-lockdown daily average, and in Delhi NCR it was 57 percent and 93 percent respectively.

Metros other than Mumbai and Delhi saw the value of transactions rise to 104% of pre-lockdown phase, while in tier II and III centres they were 60% and 88% of pre-lockdown average. Speaking to TOI, Pine Labs CEO Amrish Rau said the data showed that while fewer shops were open, the average spending was much higher. The shops that remained closed included the ones in malls, which did not open up even in cities where the lockdown had eased.

Since card-accepting merchants are categorised according to the nature of the business, it is possible to identify the segments that saw more spending. Analysts say that summer sees an increase in the sale of air coolers, air conditioners and fans.

“What we also saw was a jump in EMI on card payments, which we facilitate. Last week we recorded our highest ever EMI-oncard transactions. This might have to do with the fact that some NBFCs, which have been financing consumer durables, were not operating,” said Rau.

According to the Pine Labs data, small cities like Ludhiana, Chandigarh, Mohali, Lucknow and Dehradun are the ones witnessing pent-up demand, and this is growing for purchases of electronics and home appliances, driving sales in the consumer durables segment. Times of India

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