The modest kirana and its pandemic-induced evolution

In India, kiranas hold nearly 90% of total trade share. Business grew by 40% during lockdown.

NEW DELHI: Sixty-nine-year-old Tejinder Singh, the owner of a kirana store in Ghaziabad, opens his shop at the crack of dawn every morning without fail for the last 21 years.  Not much has changed for him apart from the fact that Singh, and his store, faced a little cash crunch during the initial days of the lockdown in March.

While e-commerce was battling red-tapes during lockdown, the local kirana stores were serving their consumers with doorstep deliveries. Within three months of lockdown, consumer spends in kirana stores increased by over 40 per cent.

Singh sits at the counter with a mask covering half his face, disposable gloves and hand sanitiser next to him. Every customer who walks in has to first sanitise their hands before touching anything in the store. Singh has two staff and his two sons who assist customers with their purchases. He ensures that no one is without masks and gloves.

“Lockdown came as a shock for every business. But we also saw this as an opportunity to help our customers with essentials. We provided door to door deliveries by following hygiene measures. We made several trips to godowns in private vehicles to bring goods to stores, personally because there was lesser manpower.  We start at 6 am in the morning every day and informed the customers about the goods when it became available again. We see new and younger customers coming to our stores or calling us to order. We are following the protocols and not letting sales staff into the store. We sanitise each and every product before handing it out to a customer,” Singh says.

According to Pontem Integrated co-founder and BBDO Advertising former president Rajesh Sikroria even before Covid2019 outbreak, almost 90 per cent of India was still buying groceries and daily need items from kirana stores. As the pandemic struck and the country went into lockdown, even people who preferred organised mega retail stores or e-commerce for their daily grocery needs were left with no options. It took some time for organised retail and e-commerce to get their machinery going but the good old kirana was still there.

“I believe there are a few things that have always worked in favour of kiranas; the Covid2019 crisis has just reinforced them. There is a greater trust and dependability on kirana stores because these people are a part of the community, so in case of a crisis, familiarity helps build that trust. A huge factor that works in favour of kirana is credit, which large stores and e-commerce companies cannot match. And lastly, very personalised service and the neighbourhood kirana always remains a faster option to get anything. Most of the mass FMCG brands have always had the largest share of their distribution pie residing with the kirana stores. But the last few years have also seen newer and some smaller brands focusing on only modern trade and eComm channels. A lot of such brands would have struggled and may continue to struggle for some time because of their absence from the biggest retail network,” Sikroria shares.

Bizom recently released a report on India kiranas wherein it states that India’s retail ecosystem is unique from most parts of the world. Indians buy over 85 per cent of consumer products from small kirana stores, making its markets driven by general trade. 

The report also mentions howSarsCov2 impacted the revenues of kiranas in March 2020. It says that kiranas saw a drop of 15 per cent in the number of transactions but picked up soon after as people started stocking essentials which saw a hike in the number of transacting and it somewhat lessened the impact of non-transacting outlets.

In the initial phase of lockdown, many shopkeepers were struggling to replenish stocks. The kirana stores used to seek replenishment every two to three days. Items such as packaged flour, biscuits, soaps and instant noodles were no longer available and many had to wait for further supplies stating transportation being an issue. Fintech companies including Paytm, Google Pay, PhonePe are also bridging the gap between the store and the customers by making payments hassle-free experience. 

FLC Marketing & Events business head India operations Rohit Shah says, “Panic-stricken and safety-conscious shoppers are visiting the traditional retail shops kirana stores to buy essential food items. The shoppers now avoid hypermarkets like Big Bazaar and Spencer’s to avoid huge public gathering and safety issues. Also, the new category of ‘work for and from home’ shoppers in the metros want to make short trips to neighbourhood stores due to time constraints. They also want to socialise for some time in kirana stores by maintaining social distancing parameters. Seeing and touching the product physically before buying also make people visit kirana stores. People are now experimenting in the kitchen. They demand kirana stores to stock items required to prepare new and age-old recipes and are ready to wait for long durations for unavailable products. People are even ready to buy local brands if they meet the requirement in the recipe.”

The digital transformation of the kirana business that has been underway for the past few years was accelerated in the past three months, bringing more kiranas online, making buying and selling more efficient, digitalising bookkeeping and inventory management. Players like ShoppyFier, an online to offline hyperlocal deal discovery platform, sent out push notifications through which users can see all the offers/discounts running nearby and merchants can promote their long-term and short-term offers.

As of February, India had 6.65 million kirana stores in the country, according to Nielsen. Unlike in the west, general trade stores in India form nearly 90 per cent of the country’s total trade. The overall contribution of supermarkets and organised grocery stores remains at 10 per cent. 

Reportedly, the government is planning to set up a chain of 20 lakh retail shops called ‘Suraksha Stores’ across India which will provide daily essentials to citizens while maintaining stringent safety norms. The Suraksha Stores initiative will convert the neighbourhood kirana stores into sanitised retail outlets selling daily essentials while adhering to safety norms such as social distancing and sanitisation to control the spread of Covid2019.

“It seems that big brands are now thinking of helping out the modest kirana stores to navigate the new normal. A consortium of brands is trying to partner with government and help convert the local kirana stores into sanitised, professional retail operations. This will see traditional kirana stores turning into registered ‘suraksha’ stores. They will be listed on the GoI’s Aarogya Setu App for following proper sanitation practices, using masks and gloves and implementing social distancing at their outlets,” Sikroria adds.

Pulp Strategy founder and MD Ambika Sharma says that buying local and relying on your neighbourhood store has captured the consumer imagination but re-evolution of kirana stores will not impact sales of big brands.

“For brands, this will not impact sales however it does call for the necessity of improving the supply and delivery channel to kirana stores. For gourmet brands, this shift may result in a dwindling uptake, with the advantage of impulse buying no longer available. Gourmet brands also do not have a strong supply channel with kirana stores and this would be an area of improvement as the trend becomes stronger,” she says.

“All the brands that have effectively communicated about taking all the safety and precautionary measures, showed how they are taking care of the consumer and also set up ease of shopping have managed to stay afloat. Innovation has been the key to all brands to stay alive during this pandemic,” said Spicetree Design Agency founder Shiraz Khan.

For Option Designs co-founder Rahul Gandhi, the kirana stores were able to sail through the storm of difficulties because of their alacrity to adaptability and agility. Where on the one hand they intensified their delivery services, on the other hand, they took to transformation by going digital which brought them overwhelming results.

“In a similar way, brands must also adapt themselves to the changing situations. By understanding the changing consumer behaviour they must come up with some real brand strategies that are in sync with the needs or demands of the consumers. Brands must constantly upgrade themselves by innovating and that will help in reaching out to a wider consumer base,” he says.

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