Small Struggles
Business Today|February 10, 2019

One year after GST, industry numbers suggest that the very small FMCG players are struggling; only the mid-level brands are left to give competition to national players.

Ajita Shashidhar
Small Struggles

JAYESH SHAH runs a wholesale-cum-retail grocery shop in Navsari, Gujarat. He claims he is one of the lucky few traders who emerged victorious from demonetisation because he was as comfortable with cheque payments as he was with cash. Now, in the Goods and Services Tax (GST) era, he proudly says he is GST compliant, though he murmurs in Gujarati that his costs have doubled due to GST. Filing monthly returns, hiring an accountant and having a resource who is computer friendly have added to his expenses. But as one gets into a conversation with him, one realises that GST has changed the way he does business. Till a year ago, he was keen to push locally manufactured brands. If a person came for a 10 soap, he would give him a lesser known brand such as Santosh even though he kept all major national brands such as Lifebuoy, Hamam and Godrej No.1. The local manufacturer gave him higher margins and longer credit com-pared to the established national brands. Similarly, in namkeens, he preferred regional brands such as Gopal Namkeen to the more established regional brands such as Balaji Wafers. The likes of Kurkure and Bingo were seldom seen. Now, things are different. “Aaj kal bade comapaniyon ke saath dhanda karne mein zyada maja ata hai,” Shah says in Gujarati accented Hindi.

GST has turned the tide in favour of the bigger com-panies and sales of locally produced brands have dipped by close to 30 per cent, he says. The latter are unable to give the kind of margins they used to offer in the preGST era. The reason is simple — most of them never paid taxes earlier. GST has brought them into the tax net. “It’s not that the likes of HUL or Dabur are paying us higher margins after GST. But if we sell 50,000 or 100,000 worth of their products a month, they pay us 2-4 per cent higher margins. The local brands give us nothing,” says Devi Das, a wholesale grocery dealer.

Denne historien er fra February 10, 2019-utgaven av Business Today.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra February 10, 2019-utgaven av Business Today.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA BUSINESS TODAYSe alt
"Focus on the challenge of each customer"
Business Today India

"Focus on the challenge of each customer"

SHASHANK KUMAR MD & CO-FOUNDER I RAZORPAY Razorpay is India's first full-stack financial solutions company

time-read
1 min  |
December 08, 2024
PEDAL ON THE FUTURE
Business Today India

PEDAL ON THE FUTURE

THE MG WINDSOR EV, WITH ITS FUTURISTIC AND MINIMALIST DESIGN, COMBINES THE BEST OF BOTH WORLDS-COMFORT AND TECHNOLOGY

time-read
1 min  |
December 08, 2024
BREATHE EASY
Business Today India

BREATHE EASY

Whether you're battling allergies, looking to remove pollutants, or simply want to breathe easier, the right air purifier can make a difference

time-read
2 mins  |
December 08, 2024
The Taste of India in a Glass
Business Today India

The Taste of India in a Glass

FROM ROYAL LIQUEURS TO DISTILLED MAHUA, INDIAN HERITAGE ALCOHOLIC BEVERAGES ARE HAVING THEIR DAY IN THE SUN

time-read
4 mins  |
December 08, 2024
LOOK BEFORE YOU LEAP
Business Today India

LOOK BEFORE YOU LEAP

IN 2025, INVESTORS WILL NEED TO FACTOR IN VOLATILITY ACROSS ASSET CLASSES

time-read
5 mins  |
December 08, 2024
MISSING ADVISORS
Business Today India

MISSING ADVISORS

INDIA HAS JUST ONE INVESTMENT ADVISOR FOR NEARLY EVERY 200,000 INVESTORS. AT A TIME WHEN RETAIL PARTICIPATION IN THE STOCK MARKETS IS BOOMING, THIS ASSUMES SIGNIFICANCE

time-read
7 mins  |
December 08, 2024
TURNING A CORNER
Business Today India

TURNING A CORNER

SHARED ELECTRIC MOBILITY START-UP YULU'S SHIFT TO SERVICING THE QUICK COMMERCE SECTOR IS HELPING IT GROW FAST. IT IS NOW FOCUSSING ON IMPROVING ROAD SAFETY FEATURES AS IT TURNS EBITDA POSITIVE

time-read
5 mins  |
December 08, 2024
REALITY CHECK
Business Today India

REALITY CHECK

INDIAN STOCK MARKETS PLUNGED BEGINNING OCTOBER FOR A HOST OF REASONS, INCLUDING A FALL IN FII OWNERSHIP. HOW DEEP WILL THE CORRECTION BE?

time-read
6 mins  |
December 08, 2024
TRUMP'S TRADE TANGO
Business Today India

TRUMP'S TRADE TANGO

The return of Donald Trump as the 47th President of the US has put the global economy on edge. India, too, is unlikely to remain unaffected. How will policymakers meet this latest challenge?

time-read
9 mins  |
December 08, 2024
"The essence of the Trump administration will be transactional”
Business Today India

"The essence of the Trump administration will be transactional”

Global investor, analyst, and best-selling author Ruchir Sharma decodes why Donald Trump won the elections, what India should do, the risks, and more

time-read
10 mins  |
December 08, 2024