There are few problems that IT cannot solve. When in the early 2000’s e-commerce was being contemplated, IT set the stage for infrastructure that today has made this sector the pulse of retail. When traditional retail needed to compete with the disruptive challenge of e-commerce, it turned to IT for a robust offline (and online) POS system which has leveled the playing field in several ways. Now the next frontier worth Indian IT’s time is definitely the modernisation of the country’s age old Kirana sector. While it is hard for a city dweller (not entirely) to imagine still shopping for groceries and daily needs purchases at a mom and pop store, the reality is that nearly 65 to 75 percent of the population, still shops at the nation’s 13 million odd kirana stores. Kirana stores have held sway for nearly 7 decades and with good reason too. Most kirana shops have served generations of the same family and done admirably well to keep the larders and pantries of our homes topped up month on month.
Why kirana stores still rule
Sarla Adhikari, a homemaker from Malad says, “a simple phone call to my neighborhood kirana store and the friendly store owner makes sure I have all my essentials, normally within half an hour of the call. Oil, spices, rice, milk, he stocks it all and is as intuitive as any app out there. To top it all off if I’m ever a little short on cash, he extends me a week’s credit. He is also willing to bill me by the month and as such is extremely understanding and cooperative. Why then would I shop anywhere else?”
Kirana, as a sector doesn’t work on cold, hard cash. It seems to work on an enduring human relationship between the buyer and the stockist. It isn’t strange at all to see the kirana store owner often have a ledger dedicated to every family he services. This makes this person, a virtual supercomputer, when it comes to the needs and wants of individual families. The advent of large format retail and grocery stores over the past decades has seen a shift in loyalties. Somehow though the relatively low tech Kirana stores seem like they’re here to stay. An almost adamant mindset against the adoption of IT seems to characterise the ‘unorganised’ sector, which makes it both a problem and an opportunity for India’s IT mavericks.
Converting adversity into opportunity
While hundreds of stores have no doubt upped their game and tied up with hyperlocal delivery services like Grofers, the majority still stick to what they consider as the tried and tested as against breaching relatively new frontiers. The trend though is changing. Also the entry of grocery based e-commerce stores like BigBasket, Localbanya and others are prompting a paradigm shift in the mentality of kirana stores owners all over the country.
Take the case of Mehul Shah, his father and grandfather before him, ran a kirana store in the city’s northern suburbs. Mehul, unlike his forebears understands that the influx of e-commerce based competition will force him to adapt or become obsolete. Being a graduate and understanding the changing family dynamic, Mehul also gets the need to evolve. “I didn’t want to be like my many friends who left the family business and pursued working in a corporate environment. At the same time for the business to be appealing to me, there needed to be a profit motive, which with players like BigBasket and others being in the scene was eating into my customer base. Tying up with Grofers has actually helped me reach out to an untapped market offering prices that are beneficial to the customer.”
Like Mehul, thousands of kirana store owners now see the merit of modernising in one form or another. Rising competition in the space the Kirana store once dominated and a shift in consumer preferences towards convenience over all else has made many kirana store owners rethink their position. One of the biggest deterrents towards adoption of technology has been ignorance towards the benefits it entails.
“In the good old days a ledger and a couple of delivery boys in order to service a single neighbourhood were all it took,” says Vijay Prajapati, owner of a kirana store in Mulund, “personal rapport and prompt delivery were the hallmarks upon which my father built this business. But today no one has the time to come into shop and not being on the internet has become a distinct disadvantage. We can’t afford refrigerated trucks and motorcycles for deliveries for long distance order fulfilment and so we enlisted the help of Grofers, thanks to which my shop has never been more profitable or popular,” he beams.
Evolution in motion
Modern retail is a behemoth, already contributing nearly 15 percent to the GDP, its share of voice is only expected to increase incrementally over the next few years. In all the chic appeal of supermarkets though, somewhere the warmth, personal touch and other intangibles that have characterised the Indian grocery shopping experience for close to a hundred years is somewhere notable by its absence. Sociologist Uma Verma has an interesting take on the subject, “in a culture like India even shopping is a unique experience where everything is based on the basis of experiencing a product, touch and feel, colour, texture and sampling are extremely important to us. Add to it the personal touch that Kirana stores add to the experience, the chit-chatting, the banter and the warmth, and by comparison today’s supermarkets leave you feeling far too sanitised and cold.”
In a bid to capitalise on these intangibles and the customer experience many Kirana stores have converted themselves into mini-marts of sorts. Over the past 5 years many neighbourhoods in the city and indeed in the country have seen a redesign of sorts, with a greater emphasis on organisation, hygiene, customer comfort (air conditioners etc), stocking of high end products, third party support in the realm of logistics, and marketing. The good old handshake, consumer connect through rapport building, credit terms and in many instances in-depth knowledge of the neighbourhood have only made these mom and pop stores even more popular with the younger generation.
Atul Mestry, a college student says, “when my neighbourhood store stocks everything I will ever need, from deodorants to notebooks and snacks, why would I order it off a BigBasket? It isn’t at all inconvenient for me to simply cross the street from my place and pick me up whatever I need. The guy who runs the store understands if I’m a little light on the pocket and let’s me pay as and when I can, which for an out of towner like myself is extremely advantageous. I don’t see Localbanya doing that for me.”
What brands are saying
Consumer brands and companies are thrilled at the prospect of another outlet to stock their wares. A higher up at a well-known consumer goods company says, “kirana stores have always been a sustained contributor to our business. With them modernising, we have another avenue to stock products that are more premium in nature and the changing consumer profile seems to be responding really well to this. So it’s a win-win situation all round.”
The bottom line
The Indian kirana store is here to stay. It has always been the single largest contributor to the retail pie and this doesn’t seem to be changing any time soon. If anything the hastening of the modernisation process will give both consumer brands and customers more to look forward to. And with nearly 10 million plus stores still to jump the modernisation bandwagon, it is a huge opportunity from Indian IT’s perspective.