From retailers to front-ended delivery evangelists – the reinvention of kirana stores
Local kirana stores emerged as the saviours of people confined to their homes during the long months of the lockdown, providing the much needed grocery and other household supplies. These kirana stores also underwent some transformation in the last 6-7 months, most importantly, home delivery of goods, using digital mode of payment, taking orders over Whatsapp and in some case even tying up with food delivery apps or e-commerce platforms.
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The lockdown also saw people ordering their daily staple via e-commerce platforms. But most housewives preferred to stick with their familiar kirana wale bhaiya. As Mrs Ketaki from Andheri said, “Kirana stores are more convenient and fast as compared to online orders, because they are situated nearby and we can quickly go and get whatever products that we urgently need. For Mrs Kaushik from Powai, kirana stores scored over digital platforms because they offer the facility to pay later. “Besides, we also trust them completely with the products,” she added.
There are over 12 million kirana stores which support the nation’s retail network. According to a recent survey, 79 per cent of store owners in the non-metros and 50 per cent in the metros expressed that new buyers are coming to their store post the lockdown. Consumers who earlier preferred to shop online or from supermarkets now prefer the neighborhood kirana stores as they continue to lend a helping hand to avoid long queues outside the stores and made sure to get things on time.
Speaking to Adgully, the owner of Lucky Stores, which has outlets in Marol and Powai, admitted that in the initial days of the lockdown the revenues were not so good, but as the lockdown was extended, the revenues started increasing. In fact, he also managed to rent another new kirana store during this period. Similarly, the owner of Bhagvati Stores in Powai also said that the initial days of the lockdown were tough and the profit was less. “He added, “We had to manage everything ourselves – going to the distribution place, connect with the traders to get our goods, which was the most challenging part as transportation and movement of goods was restricted due to the lockdown. Though the demand for home delivery was increasing, there was no one to employ in the initial days. As lockdown was extended, everything got in track and we started accepting digital payments, Whatsapp deliveries and revenues have also increased during this period.” According to a Financial Express report, Indian retail is likely to touch $1.3 trillion by 2025, led by multiple structural, socio-demographic and economic drivers. The retail market is witnessing a CAGR of 9-11 per cent from 2019.
Speaking to Adgully, Harish Bijoor, Brand Guru & Founder, Harish Bijoor Consults Inc, remarked, “Kirana stores are the new physical front-faces of digital business formats. All of digitalism does require a last half-mile physical ability. That ability is offered by the ubiquitous kirana stores in India and we boast of 14.6 million of them if I include our nukkad paan shops. Kirana shops need to participate actively in the digitisation exercise offered by new entrants such as Jio platforms. If you can’t beat them. Join them. That’s the mantra that kirana stores need to invest in. The new road ahead for the kirana lies in acting as front-ended delivery evangelists as opposed to being retailers.”
Transition to digital payment modes in kirana shops started with the Government’s demonetisation move in 2016. This has gathered momentum during the pandemic period. Suhail Sameer, Group President, BharatPe, noted, “We saw an initial dip in the first couple of months of the lockdown, but the situation improved post that. We have noticed a consistent increase in transaction value, along with volume, over the last few months. To give you a perspective, in September, we recorded a 23 per cent jump in transactions and closed the month at around $350 million worth of transactions. October was even better and we recorded a 24 per cent jump in transactions in MoM basis. We clock over $5 billion in annualised TPV. With the country unlocking itself over the last few months and businesses resuming operations, digital payments are expected to grow upwards over the rest of the fiscal year. We hope to close December at a run rate of $6 billion in annual total payment value. BharatPe has been working with over 5 million small merchants, most of them Kirana stores. We have been offering them a range of products, including QR payment acceptance, loans and card acceptance machines (Bharat Swipe).”
A Paytm spokesperson also said that they are witnessing an overall increase in digital transactions as both online & offline consumer buying trends are going northwards. “Paytm offers a range of funding sources to its customers – Paytm UPI, Paytm Wallet, Paytm Payments Bank account, Debit card, Credit card and net banking. Overall, the transactions through these funding sources have grown over 20 per cent in the month of October, where over 70 per cent of these transactions are Person-to-merchant (P2M). Our All-in-One Android POS devices are also registering a month on month growth of over 25 per cent in transactions. We have launched a slew of innovative technology solutions to strengthen its merchant payment offerings with the All-in-One Android POS device, All-in-One QR, Paytm for Business app and Paytm Business Khata. Our Paytmsoundbox has become extremely popular among the merchants as it gives them an instant voice-based payment confirmation.”