Is UPI killing India’s toffee business?

India’s UPI boom has transformed the way we make payments, but it’s also had an unexpected consequence—it's killing the toffee business! According to National Payments Corporation of India (NPCI) data, UPI transactions has soared to billions per month. While this digital revolution has made life easier, it has hit an unusual target—candy sales at kirana stores.

No Change To UPI
For decades, shopkeepers across India used to hand out toffees as substitutes for small change whenever they ran out of coins. Phrases like “chutta nahi hai” became a part of everyday shopping experiences.

Big Toffee Brands Hit
In fact, this quirky workaround created a thriving market for candy brands like Mondelez, Parle, Nestlé, and Perfetti. But now, with UPI allowing consumers to pay the exact amount digitally, there’s no longer any need for toffee substitutes.

Toffee Biz: The UPI Hit
Chartered Accountant Harshad Shah highlighted this trend on LinkedIn, noting: “Before UPI, shopkeepers would trade toffees for small change, claiming they didn’t have coins. Over weeks, these small sums added up to large amounts. But now, with digital payments ensuring the exact amount is paid, this practice has vanished—taking daily toffee sales down with it.”

Sharp Decline Post COVID-19
Big candy brands that once thrived on this culture are now reporting a noticeable decline in sales. Even international players have reportedly felt the impact, with India becoming one of their most challenging markets post-COVID. Though some market analysts have pointed out that while UPI has contributed to changing consumer habits, it is not solely responsible for the decline in candy sales.

However, this unexpected disruption in the candy business shows how financial innovations like UPI can reshape consumer behaviour, even in areas one wouldn’t expect. Who knew that a payments app could become a competitor to toffee?