Impact of Demonetization on Local Search and Businesses

In a massive crackdown on black money, government has decided to discontinue Rs 500 and 1000 currency notes in an announcement made by Prime Minister Narendra Modi. While this decision has lead to queues outside ATMs all over the country, it has also reduced the amount of cash available to people to spend. That in turn has impacted the local businesses where most of the economic activity happens. Local Search is a key indicator to mirror the local business activity and we see a significant drop in the recent past.

We got a little worried when we saw our traffic on 9th Nov was significantly lower than the usual. We got a bit worried and did the usual check on any Google search algorithm update or a machine having some problems. But none of that had happened and there were no other parameters had changed for us. We continued to watch the situation over next few days and we became reasonable sure that this reduction in traffic is due to demonetization. When people have less cash in their hands, the probability of searching for a local business and doing a transaction also decreases.

 

Here is our data analysis in terms of search volumes

Comparison Dates: 9th Nov to 13th Nov, 2016 – 2nd Nov to 6th Nov, 2016

Source of analysis: Google Analytics ( take it with a bag of salt )

  1. Bangalore – 17%
  2. Chennai – 0.42%
  3. New Delhi – 13%
  4. Mumbai – 28.36%
  5. Kolkata – 21.89%
  6. Pune – 18.68%
  7. Ahemdabad – 18.75%
  8. Jaipur – 17.67%
  9. Chandigarh – 19.89%
  10. Noida – 9.43%
  11. Lucknow – 30.97%
  12. Kochi – 14.92%
  13. Patna – 7.06%
  14. Navi Mumbai – 11.03%
  15. Indore – 17.8%
  16. Gurgaon – 12.39%
  17. Coimbatore – 11.86%
  18. Visakhapatnam – 19.58%
  19. Secunderbad – 10.9%
  20. Guwahati – 24.03%
  21. Thane – 16.32%
  22. Ludhiana – 20.33%
  23. Bhopal – 32.53%
  24. Pimpri-Chinchwad – 6.87%
  25. Bhuvaneswar – 17.66%
  26. Ghaziabad – 6.62%
  27. Dehradun – 34.42%

 

Overall traffic drop – 16.06%

Desktop Traffic – 15.2%

Mobile and Tablet Traffic – 17.09%

 

Traffic changes in some related categories

Post Office – Increased by 57.2%

ATM/Banks – Increased by 85.2%

 

So here are our key inferences from this

  1. Metros have a lesser impact compared to smaller cities
  2. Chennai shows zero impact but that might be due to search for something else being higher
  3. Minor difference between mobile users and desktop users
  4. Since AskLaila works across a large number of categories, these numbers are not a reflection of just lifestyle categories
  5. Significant surge in ATM/Bank/Post Office search.

 

I will be happy to dig more data and share if you are interested.

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4 comments

  1. That’s an insight. Definitely there is an impact in business. What needs to be seen is when it starts rising back and is there a surge after some point of time.

  2. We can see the effects of demonetization in now a days. PM modi ji took a great step towards black money. It also helped in corruption.

  3. Demonetization impacts on both type of businesses(small as well as large).
    People have to go to banks and atms to submit their money and it took whole day. That’s why people use internet less as compare to other days. They are busy in exchanging their notes.

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