By Uditi Kalra

The rapid expansion of e-commerce in India has transformed consumer behaviour, especially during the pandemic. According to a report by India Brand Equity Foundation IBEF (2022), India’s e-commerce market is expected to reach $188 billion by 2025, fuelled by increasing internet penetration and digital payments. With giants like Amazon and Flipkart dominating the landscape, there’s growing speculation about whether traditional Kirana stores, the backbone of India’s retail ecosystem, can survive in this digital age.
Kirana stores, often family-run, hyper-local shops, have been central to Indian retail for decades, contributing approximately 88% of the total retail sales in India (Deloitte, 2020). However, the surge of e-commerce and the convenience it offers has challenged their relevance. Yet, despite the rise of e-commerce, Kirana stores have displayed resilience, adapting to the changing market in surprising ways.
The Resilience of Kirana Stores
While e-commerce platforms offer a wide range of products with the convenience of doorstep delivery, Kirana stores have distinct advantages. They have a deep-rooted understanding of local consumer preferences, allowing them to offer personalized services, such as credit-based purchasing, home deliveries, and tailored product suggestions. Furthermore, Kirana stores have flexible working hours, making them indispensable for last-minute purchases.
According to a report by Ernst & Young (2021), over 80% of consumers in Tier II and Tier III cities still rely on Kirana stores for their daily needs, emphasizing their continued relevance in semi-urban and rural areas. Additionally, e-commerce companies have recognized the potential of these local stores and started collaborating with them, incorporating them into their supply chains for last-mile delivery and faster distribution.
The Digital Transformation of Kirana Stores
Kirana stores are also leveraging technology to stay competitive. The Indian government’s Digital India initiative has pushed for digital payments, and Kirana stores have readily adopted systems like UPI, Paytm, and Google Pay to offer cashless transactions. A survey by PwC (2022) found that around 65% of Kirana stores now accept digital payments, an increase of 40% from just five years ago.
Furthermore, platforms like JioMart, ShopX, and Udaan are empowering Kirana stores to digitize their inventories, access a wider range of products, and streamline their supply chains. JioMart alone has onboarded over 300,000 Kirana stores (ET Retail, 2021), giving them the infrastructure to compete with larger e-commerce players. These collaborations help Kirana stores improve their efficiency, offer competitive prices, and reach new customers.
The Complementary Coexistence
Rather than seeing e-commerce as a threat, many Kirana store owners view it as an opportunity. The hybrid retail model is emerging, where e-commerce platforms are utilizing Kirana stores to facilitate faster deliveries while Kirana stores benefit from the technological advancements of these platforms. This symbiotic relationship has led to what is being referred to as the “Phygital” (physical + digital) model of retail, which combines the convenience of e-commerce with the accessibility of local stores.
In fact, data from RedSeer (2022) indicates that over 40% of online retail deliveries in India are fulfilled through local Kirana stores. This collaboration has strengthened the supply chain, cut costs, and ensured faster deliveries, providing mutual benefits to both consumers and businesses.
Challenges and the Way Forward
While Kirana stores are thriving in many areas, they still face challenges in larger urban centres where consumers increasingly prefer online shopping for convenience. The influx of discount offers, wider product variety, and advanced logistics systems from e-commerce giants poses a continuous challenge.
To stay relevant, Kirana stores must continue to evolve. The government’s support in helping local stores digitize, along with further integration with e-commerce supply chains, could ensure their survival and success. Introducing training programs that help Kirana owners adopt digital tools and improve customer service will also be crucial in this process.
Conclusion
Kirana stores may be challenged by the e-commerce wave, but they are far from obsolete. With technological advancements, digital payment systems, and collaborations with e-commerce platforms, they have successfully adapted to the changing retail landscape. Kirana stores remain crucial for India’s retail ecosystem, particularly in semi-urban and rural areas, while offering the personal touch and convenience that big players often lack. As India moves forward, it’s not a question of whether Kirana stores will survive but how they will evolve alongside e-commerce to meet the needs of tomorrow’s consumers.
References
A Satellite Account to Measure the Retail Transformation: Organizational, Conceptual, and Data Foundations | The National Academies Press
https://www2.deloitte.com/in/en/pages/about-deloitte/articles/future-of-retail. html
Grocery: JioMart tie up to benefit kiranas hit by loss of market share, ET Retail
Kirana stores prepare for the future - Opinion News | The Financial Express
About the Author
Uditi is a first year undergraduate student at The Jindal School of Government and Public Policy, pursuing Economics (Hons). Her areas of interest include Indian Democracy, Consumer Behaviour, Neuroscience and Indian Mythology
Comments