India’s mom-and-pop stores have proved yet again why the Amazons of the world need them
Covid-19 has provided a massive push to online shopping across the world. But in India, the pandemic has also proved that the ubiquitous kirana stores—neighbourhood corner shops that sell daily staples from soaps to pulses—are here to stay.
India has over 12 million kirana stores. These small shops—often with a clientele limited to one street or a block—have been declared obsolete many times in the past, especially as e-commerce picked pace in the country and giants like Amazon, Walmart, and Reliance entered the grocery segment.
Yet, on March 25, 2020, when India went into a lockdown overnight, most e-commerce companies in the country left thousands of their customers high and dry as supply chains were broken and delivery staff was not allowed to commute long distances due to local restrictions. At the same time, mom-and-pop stores in most parts of the country continued to serve their clients—sometimes through half-open shutters to steer clear of cops as guidelines on essential stores were not initially clear—and attract new customers.
“On the first day of the lockdown, the app that I had been relying on for almost a year for milk and vegetables, stopped delivering in my area. It just displayed a note saying ‘we are not operational due to restrictions’ and I was in a state of panic because I had very limited supplies at home,” said Neha Sharma, a 35-year-old resident of Gurugram on the outskirts of Delhi. A year on, Sharma has deleted the grocery app as she buys all staples from the “pados ki dukaan” (neigbourhood shop)
“The Covid situation is still unstable and I cannot rely on these internet companies. They will simply stop service any day without offering any alternatives,” Sharma said. “I feel the kirana shopkeeper is far more reliable because I know him, and he won’t just leave me hanging with a ‘not operational’ note.”
Sharma’s concerns were validated earlier this year. In April, when the second wave of Covid-19 hit India, many grocery apps again struggled to fulfill orders. Meanwhile, kirana store owners, who often have a personal rapport with their customers, sprung into action. “I made sure I personally picked the material from the distributors and provided it to the customers,” Sriram, a kirana store owner from Meerut in the northern Indian state of Uttar Pradesh said.
Ambani and Bezos want the kiranas
If naysayers had heard what the veterans said, they would have never fallen for the idea that an app could replace the good old kirana.
“Kiranas will grow, at least for the near foreseeable future… it is still a major form (of retail in India). I don’t expect e-commerce to be a large part of FMCG offtake in this country, not in the near future,” Adi Godrej, an Indian industry titan and chairman of consumer goods major Godrej Group, had told Quartz in an interview in 2017.
Realising the potential of the small stores, despite their deep pockets, Mukesh Ambani’s Reliance Industries and Jeff Bezos’ Amazon, have been trying to leverage India’s kirana ecosystem to grow their perishables business, instead of setting up entirely new infrastructure.
While Ambani’s grocery delivery service JioMart is working overtime to add kirana stores as its franchise partner across India, American retail giant Amazon, in March, roped in 50,000 kirana stores to sell their products online through its platform.
The competition among the retail giants to team up with them will give the kirana stores the opportunity to negotiate the best possible terms, said Manish Aggarwal, director at Bikano, an Indian food brand. “Adapting technology will bring some teething troubles for such stores but once they will master the tech, the sky will be the limit,” he added.
Kirana stores keep up with tech
From accepting payments via online wallets to taking orders on WhatsApp or tying up with tech-enabled delivery partners, the kiranas have come a long way from being ordinary neighbourhood general stores.
Over the last year, more than a million kirana stores in India have adopted technology for payments, delivery, or managing inventory.
“A kirana store is accessible, timely, convenient, and in some cases even more affordable than larger supermarket firms. A kirana store armed with a technology-enabled delivery partner is much more accessible, especially in smaller markets where deliveries can take place within hours instead of slotted days,” said Aravind Sanka, co-founder of Rapido, a bike taxi company that has a tied-up with over 7,500 kirana merchants to facilitate delivery.
Besides tech, some kirana stores are also using the grocery startups’ playbooks to get more customers.
For instance, Amit Gupta, the owner of a kirana store in Meerut, invested around Rs50,000 ($686) on advertising in the newspaper during 2020 to attract more customers. “I have been using Facebook and WhatsApp business account also to inform my customers about the 24*7 delivery option,” Gupta said.
Some are even offering “freebies” like their heavily-funded startup rivals. Sriram, has been taking orders with no minimum amount restriction. “From an order worth Rs5,000 to a single milk packet, I deliver everything without any additional charge,” he said.
Meanwhile, Zypp Electric, an electric vehicle-based EV firm, told Quartz that several kirana stores have tied up with the company for delivery. ”On a daily basis, we are doing at least 5,000 grocery-based delivery,” said Akash Gupta, co-founder and CEO of Zypp Electric.
Given the wide reach of the kirana stores, PayNearby, a fintech firm, is planning to rope in over 150,000 shopkeepers to participate actively in the vaccination drive.
“The kirana stores have always been a crucial part of the Indian economy as well as an important hub for community exchanges. They enjoy a very high level of trust and familiarity in their local areas. This local trust will be channelised to create social awareness around the importance of immunisation and also assist citizens limited by tech ability and language barriers to seamlessly register for the vaccination program,” the company said.
