Kirana stores need an equal playing field

Published: July 23, 2018 3:05 AM

Over the years, technology has been impacting every aspect of people’s lives. From bill payments to ordering a ride, the country is moving towards the digital age.

Kirana Stores

Over the years, technology has been impacting every aspect of people’s lives. From bill payments to ordering a ride, the country is moving towards the digital age. Despite the stupendous growth of online grocery players, one set of businesses has largely remained unaffected with the growing digital trend—the local kirana stores. Even with the burgeoning of large offline retailers and supermarkets, kiranas have been flourishing, witnessing an upscale ride in their business. Present in every nook and cranny of rural and urban India, kirana stores have always remained the preferred choice of the consumers, making them omnipresent and thriving constantly at a rapid rate.

From the coming of big-box retail format to avalanche of online grocery companies, kirana stores have seen it all. Factors such as the ease of access and on-demand convenience have made sure that the small retail shops grow seamlessly in terms of their market size. Armed with extensive knowledge of the local tastes, ready for home delivery of even a bar of soap, and interpersonal relationships unbeatable by technology, kirana stores carry a charm of their own. These small mom-and-pop stores are here to stay, and to thrive. In fact, there exist close to 1.2 crore small kirana shops in the country, and they dominate India’s grocery retailing with an immense 98% share of the grocery retail business.

However, these shops face a lot of challenges, such as lack of the necessary technology, an inadequate supply chain, and very limited direct reach of FMCG brands. These unorganised stores keep fewer inventories and they face regular “stock out” issues. They also face regular working capital challenges as they have inadequate finance available.

The return-on-investment-conscious brands’ distributors often do not reach out to the mom-and-pop stores running in the farthest ends of rural and urban India. While the larger FMCG companies are encouraging bigger retail stores, supermarkets and online retail players in India, the small retailers who are key to a neighbourhood’s ecosystem should not be left behind. These kirana stores should be supported with an “equal playing field” of choice, pricing and service, and should be made a part of the larger technology ecosystem. These stores are the only retail players across the entire retail market who have an in-depth knowledge of the consumption patterns of the local customer base, hence they act as local curators of products for the end-consumers.

Kirana shops are also a source of livelihood for millions of local entrepreneurs with little or no skills. The unskilled and semi-skilled migrants from different parts of India in search of employment opportunities have accepted grocery retailing as their occupation and have been learning the traits of small-scale business management. Running a kirana store is the only means of earning for such entrepreneurs.
It is crucial to digitise and hyper localise these neighbourhood stores. They should be equipped with solutions such as digitalisation of payment and back-end integration of kiranas with wholesale suppliers. These players also need credit facility support to tackle working capital issues.

Therefore, to meet the unmet needs of kirana stores, businesses should take the onus of organising these small retail shops and provide them with technology and logistics support. Start-ups like ours have rightly identified the huge potential in this sector and are trying to fill the gap by organising this hugely unorganised market. As a provider of end-to-end technology solutions along with state-of-the-art logistics management to kirana stores, such companies are also constantly innovating their technology platform with a long-term aim to democratise kirana stores by providing them an equal playing field at par with large FMCG players.

Samarth Agrawal
Co-founder and CEO, MaxWholesale

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