With quick commerce platforms like Swiggy’s Instamart, Zomato’s Blinkit, Zepto and BBNow backed by billion-dollar war-chests rapidly eating into their market share, Kirana stores face a stark existential challenge.
According to a Datum Intelligence survey, mom-and-pop stores are set to lose $1.28 billion in sales in 2024 alone, with their market shares tumbling. The survey says that 82 per cent of quick commerce users in metro cities have shifted a quarter of their grocery spending from kiranas to the Blinkits of the world.
But if you thought the kiranas are rolling over without a fight, think again.
The ten kirana shop owners Outlook Business spoke to across various locations in Delhi chorused that they are embracing technology to maximise convenience and mimic the shopping experience offered by the quick commerce start-ups. These reinvented kiranas are giving the new age customer what he wants: online orders, home delivery, credit options and no-questions-asked returns and replacement.
Lucking Out with Tech
As the grocery and kitchen segments are the worst hit by the quick commerce surge, players in these categories are experimenting with taking orders and scheduling home delivery on WhatsApp.
“We can’t go fully online so we have started taking orders on WhatsApp Business and also do free home delivery for orders above Rs 200 within 1 km and for those exceeding Rs 500 within 2-3 kms. This is working fine as people schedule their monthly or daily orders in advance,” Madhur Kumar of Maa Durga Grocery Store in city’s Akshardham area says. “Our staff make a note of orders received on WhatsApp and start packing instantly”.
He adds that while this does not guarantee that his customers won’t go to quick commerce platforms, it underlines that to weather the storm, traditional stores like his would simply have to adapt and evolve by buying into new technologies. The situation is dire indeed. “The quick commerce surge could wipe out the entire industry,” he says.
Madhur Kumar is certainly not wasting time. “We have registered our business on all the available platforms like Google Business and JustDial and are also using social media to promote our etail promise of 30-minute delivery of all online orders within a 2-km radius.”
Shalini Gupta of Navrang Beauty in Acharya Niketan says that its sales have been plummeting over the past few months. “We have had to trash a lot of our inventory as many beauty products come with short shelf lives. Faced with the threat, we have started moving to online sales.”
Offering Convenience Like Online
Traditional mom and pop stores are evolving to stay relevant in the age of quick commerce by blending technology with personalised service. Beyond integrating tech, these stores are building on long-standing relationships with their customers offering convenience like credit accounts or khata that digital platform cannot match. Store owners are also strategically prioritising their most valuable customers, those who rely upon them for monthly essentials by tailoring services to their needs. This mix of personal connection and adaptability is helping them hold their ground in a rapidly changing retail landscape.
Several local shop owners are stepping up their game offering digital billing, free home delivery and return and replacement services. “We have been providing these services for long and they helped us retain our customers through the pandemic times," one shop owner shared.
However, the founder of a “dukantech” start-up believes this model is essentially suited to Tier-2 cities like Varanasi, Patna and Bathinda where quick commerce platforms are expanding but the traditional credit system continuous to holds sway. In metro cities where such practices are relatively unknown, such advantages may not count. He added that kirana stores still have a unique edge in offering freshly sourced products but even this advantage is subject to evolving customer preferences and lifestyles.
Satish Meena, an advisor at Datum Intelligence, noted that the traditional credit model may not retain its currency in the long run. Quick commerce companies are increasingly collaborating with pay later options like Simpl to offer seamless payment options posing a new challenge to kirana stores.
“We provide fresh stock unlike quick commerce platforms. If the quality of any item isn't up to the mark we assure customers that we will handpick a replacement with no questions asked. Online platforms, on the other hand, often subject users to a long and cumbersome return processes,” shared a shop owner, who recently started experimenting with such customer-focused practices.
Sonakshi Nathani, co-founder of Bikayi, an e-commerce solution for social businesses launched in 2019, suggests that kirana stores could turn the issue of poor-quality associated with quick commerce platforms into a competitive advantage. “The freshness of fruits and vegetables at local vendors are unmatched. These vendors source directly from farms and sell fresh stock daily. Kirana stores can capitalise on this strength and explore selling online,” she explained.
She emphasised that kirana stores must think of reinventing themselves by breaking out of the warp of outdated brands and partner with emerging D2C labels that dominate quick commerce platforms. Customers today seek variety and often assume that new launches would not be available at the local shop. Collaborating with young labels can help kirana stores break that perception.”
The ONDC Way
The Traders' Union of Green Park, an upscale New Delhi neighbourhood, is boldly challenging the quick commerce wave. In a strategic move, it has onboarded around 250 local shops to the ONDC network through a focused drive, recognising that digital transformation is essential for staying relevant and reaching a broader customer base. "The streets of Green Park bustle with Blinkit and Zepto delivery partners even late into the night. Our shop owners were struggling, so we found a way to go online. It’s proving successful, as they can now reach a wider audience and recover previous losses," a union member shared.
ONDC in collaboration with Kiko Live, an SAAS platform for neighbourhood stores, reported processing nearly half a million orders through its network. Since joining the open network in December last year, sellers using Kiko have seen impressive growth, managing nearly 3000 to 4000 orders daily. Kiko works directly with kirana stores to help them digitise their operations and tap into the digital marketplace. Alok Chawla, co-founder of Kiko Live stated that they plan to help retailers process over 1.5 million monthly orders before the end of FY25, on the ONDC network, by offering kirana stores a digital storefront.
Last year, Hindustan Unilever (HUL), India’s largest packaged consumer goods company, announced plans to on-board nearly 1.3 million kirana stores to the government’s ONDC. This initiative aims to empower these stores to compete with the growing number of e-commerce and quick-service grocery retailers.
Action replay?
This isn't the first time kirana stores have tried to jump onto the technology bandwagon. During the pandemic when everything shut down and people stayed home, start-ups like Dukaan, Bikayi and Khatabook gained traction backed by strong funding. However, the momentum slowed when both founders and investors realised that this business model might not be sustainable in the long run.
“Kirana stores lack the resources to manage their own marketing,” explains Sonakshi Nathani. “We initially tried to drive traffic to the websites. but this approach required significant capital, something that did align with the typical kirana store's priorities.”
She believes tech can benefit kirana stores, but only if they offer unique products or a clear selling point. If it is just about reselling established brands, customers will naturally turn to quick commerce platforms. So, for kirana stores technology alone isn't enough; it requires strategically thought-out implementation,” she added.
During the pandemic several dukantech start-ups flooded into the retail space, offering digitisation tools to kiranas and securing substantial funding. However, many of these start-ups have gradually faded, as the reality seeped in that most kirana stores were not ready to invest in digital transformation.
Satish Meena explains that technology can benefit only kiranas with a unique selling point. “If it is a bakery or a fresh exotic vegetable shop, tech can make a difference. But for the typical neighbourhood kirana it is not a solution as it simply cannot offer the kind of convenience that quick commerce platforms provide,” he says.
The founder of a now defunct dukantech start-up echoed this sentiment stating that the business model simply wasn't scalable. “We tried everything during the pandemic offering solutions to kiranas as an experiment, but it only work for the larger stores in prime locations not the small neighbourhood shops,” he shared.
The Discount Dilemma
While kiranas continue to innovate to retain customers, many remain hesitant to engage in deep discounting and instead accuse quick commerce platforms of engaging in predatory pricing practices that undermine competition.
Manoj Jain, owner of Ekta Kitchen Gallery in Pandav Nagar, Delhi, is frustrated by the deep discounts offered by quick commerce companies, even on electronic appliances. “Margins on products like mixers and blenders are wafer thin, only 5 to 7 per cent,” he explains. To complete, his store offers gifts like crockery sets and bottles on purchases over a certain amount.
According to Meena quick commerce players enjoy higher margins on electronics (up to 10 per cent) enabling them to offer steep discounts on lower-value products like groceries. Similarly, quick commerce platforms can afford discounts for ice creams and dairy products, where they typically enjoy margins of up to 20 per cent due to their size and negotiating power with suppliers. In contrast kirana stores struggle with miniscule margins and cannot afford such discounts.
Owner of a local ice-cream parlour in Mayur Vihar echoes this frustration: “There is no way I can offer discounts on MRP products. Zepto and Swiggy can because they have the capital to cover those losses. He adds that the newer brands offering healthier alternatives are largely distributed on quick commerce, contributing to his declining sales. However, the founder of a newage ice cream brand notes that quick commerce provides immense visibility and free promotion before going offline making it an attractive platform for brand exposure.
Pravin Khandelwal, secretary general of the Confederation of all India Traders and a Lok Sabha MP, recently criticised quick commerce companies for using foreign direct investments to fund their losses and selling near-expiry products at deep discounts.
Despite the best efforts, kirana store owners and trader bodies remain deeply concerned about the growing dominance of quick commerce. Industry stakeholders are proposing collaboration between kiranas and quick commerce platforms to create a balanced, mutually beneficial growth space. They are also calling on the government to intervene and safeguard the livelihoods of India's 13 million kirana store owners who contribute a staggering $800 billion to the economy.
Many industry players are losing hope that kiranas can outpace quick commerces in the long run regardless of what measures they adopt. “Unless strict regulations are introduced to govern quick commerces, kiranas will only survive in lower income localities where the quick commerce players are yet to penetrate,” says one founder.
