How coronavirus helped India's mom-and-pop kirana stores beat Amazon and Bigbasket at their own game

She knew from experience that her neighbourhood shop Ravi Stores would deliver essentials to her door. All she needed was the Google Pay app and to make a short phone call.

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Traditionally, Indians have preferred to buy their groceries on a daily basis, ensuring freshness and avoiding the need for storage. Kiranas offer unprecedented convenience; just a phone call or a slip of paper or even a shout as the customer passes by on the street is enough to place an order. The shopkeepers develop a personal rapport with their customers, who live nearby, and know their needs intimately, stocking their requirements in a small space, efficiently.

"It is an interwoven distribution system that covers every nook and crevice of the country. A bottle or sachet of shampoo put together in Ulhasnagar in Mumbai can find its way to the most distant part of the country, through an intermediate chain that creates life and livelihoods for millions of these entrepreneurs and intermediaries," said Harish Bijoor, a brand strategy consultant.

With the big e-commerce players having got the message that they can't beat the kirana stores, they've decided to join them and increasingly these hole-in-the wall shops are emerging as partners, rather than competitors for the retail giants.

While kirana stores have constraints on their space and inventories, they can provide the personal touch, allowing customers to order special items or quantities or to purchase on credit. Kiranas have fewer overheads and advertising costs than the retail giants, which have warehousing costs and logistical and marketing overheads. Also, with the advent of the pandemic many Indians prefer to shop in their neighbourhood stores rather than risk the crowds at supermarkets and other large outlets.

But most importantly, unlike the waiting lists and delays often associated with e-commerce sites, kiranas are usually able to deliver the same day.

A report by the multinational company Accenture in May 2020 estimated there were 13 million kirana shops across India, accounting for 90 per cent of domestic retail and fast-moving consumer goods sales. It suggested that by embracing new technologies such as digital payments the stores could make a big difference to the economy.

"The transformation of just 10 per cent of the 13 million kirana stores in the country could boost retail consumption by more than 5 per cent and generate about 3.2 million new jobs," said the report.

Said Swati Katakam, a PR professional who lives in Mumbai: "I have always used Vijay Stores - the kirana store around the corner. Maybe I am old school, but I like to see what I am buying and enjoy dropping by and picking up whatever I need, from fresh bread to masalas and rice. Most people in Mumbai patronise their kirana stores as parking is a hassle in this crowded city, and during the pandemic, [kirana owners] were absolutely front-line workers who helped the community with their daily necessities. It is amazing how even a small hole-in-the wall kirana shop stocks almost everything you need."

Jaffer Abbas, 24, and his friend Abdul Mirshan this year launched The Korner Shop, an online aggregator for kirana shops, tying up with kirana stores in seven areas of Chennai. They intend to brand the stores and offer them tech support to help them bring their personalised service to a greater number of customers.

M Dinesh Seervi, who owns a kirana store called Subham in Perambur, Chennai, said he had begun accepting payments via digital wallets and Google Pay and his customers had been loyal to him throughout the pandemic.

He said millennials still preferred online purchases, but for most other customers nearby, he used delivery boys to take goods to their doorsteps on a daily basis.

"Most people call me the previous day for their requirements or WhatsApp me their orders, and I am able to supply the goods to their homes. We supply them no matter how small the order is. It is a personalised service that is hard to replace."

Over the last few years corporate giants like Reliance, Flipkart, Amazon and other start-ups have realised the value of kirana shops and are keen to partner with them.

The ubiquity of kirana shops and their entrenchment in local communities makes them a good last-mile delivery option for e-commerce giants. In return, e-commerce firms help kiranas to manage inventories and replenish their stock by a touch of a button on their smartphones.

Some kirana shops now act as collection points for Reliance Retail's e-commerce start-up Jio Mart, which in turn is helping to digitise the kiranas. Walmart-owned Flipkart is also partnering kirana stores to make last-mile deliveries, providing credit options and training them in the use of technology. Flipkart serves close to a million kiranas across nine states in the country, offering them merchandise and convenient payment options.

Indian start-ups are also partnering the stores, helping them with everything from inventory management to extending credit. KhataBook, a Bangalore-based start-up, has launched a bookkeeping app that lets kirana shopkeepers maintain a digital ledger. Meanwhile Gurugram-based Phantom Codes has developed an app called Neo Mart that connects consumers to their favourite restaurants, hardware stores and kirana shops.

Ashwini Kharbanda, CEO of Phantom Codes, said: "The need of the hour is digitisation of small businesses like kirana stores, and we offer that service from listing their inventory to payment gateways."

He said the service was soon to expand from Gurugram, in Delhi, to Mumbai.

While many kirana stores are open to digitisation, many are also wary of partnering large start-ups or e-commerce firms, fearing they will be reduced to mere delivery boys.

The future may lie in a hybrid model, in which kiranas take walk-in customers and online orders for delivery.

"The future is in the marriage of the kirana store at the front end and technology at the back and middle end," Bijoor said. "That is a solution that cannot be beaten."

This article originally appeared on the South China Morning Post (SCMP).

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