Demonetization of currency to affect E-tailing, food-tech negatively: RedSeer

RedSeer Consulting, a research and advisory firm focused on achieving excellence in the consumer internet market, reveals that the various sectors within consumer internet would be affected very differently by the government's currency demonetization initiative.

While e-tailing and food tech sectors are expected to bear the brunt of the move in the near term, both online cabs and hyper-local grocery services should see a growth in transactions, as customers look to save precious cash and look to online channels to serve their transportation and grocery needs.

In the mid-term, as the liquidity conditions stabilize, most sectors would return to business as usual. However, online cabs sector is likely to be an exception and should see a growth from usual transactions- as the customers that got added in the near term are likely to stick around in the mid-term as well, driven by the strong value proposition offered by the online cab players.

"In spite of the small impact in the short term of the currency demonetization

move, we see things moving back to usual in the mid-term for the consumer internet sector. However, certain sectors like online cabs may especially benefit from this move as customers who start using online cabs in the near term would continue to do so in mid-term as well, due to the strong value proposition that online cab players provide," said CEO RedSeer Consulting, Anil Kumar.