Source: LiveMint.com, Apr 24, 2020
The humble corner store has emerged as the unlikely darling of multi-billion-dollar corporations, online supermarkets and digital payment startups, courted for its reach, agility and customer insight displayed at a time when many well-heeled online vendors have buckled.
In yet another hat-tip to India’s enterprising kirana store, global online retailer Amazon on Thursday began ramping up a programme to sign up hundreds of local grocers, a day after Reliance Jio and Facebook Inc. joined hands to power Reliance Retail’s JioMart. Soft-launched in December 2019 as ‘Desh Ki Nayi Dukaan’, JioMart currently serves online shoppers in some parts of Mumbai and its suburbs.
‘Local Shops on Amazon’ helps customers discover products from local shops, while helping shopkeepers supplement their footfalls with a digital presence, and expand beyond their normal catchment, the company said. Shops that sell groceries and essentials are already live on Amazon, since India’s strict lockdown rules allow the sale of only such items. With Amazon going full steam into the corner store network, there is more competition on the way for rivals JioMart and Walmart-backed Flipkart.
Jio, Facebook and Amazon are only the latest suitors for India’s kirana stores numbering close to eight million, a segment once perceived to be on the back-foot with the aggressive entry of swanky supermarkets and online grocery platforms. Others chasing kiranas include big retailers like Reliance Retail, cash and carry companies, business-to-business (B2B) startups and even large e-commerce firms.
Reliance Retail aims to be India’s largest omni-channel retailer through its hybrid online-to-offline new commerce platform.
“After digital payments, it is e-commerce that will usher in the next big revolution in leveraging the potential of the vast network of kirana stores and resellers across the country. E-commerce has the potential to re-position and re-invent kirana stores as convenience stores from an e-commerce perspective, while offering them a new source of revenue, making it a win-win situation for all,” said a spokesperson from Flipkart, which has already partnered 37,000 kirana stores across the country.
“Our approach to work with kiranas and general trade stores is to inculcate a sense of entrepreneurship, instil a sense of discipline and develop a rewarding ecosystem for them.
These efforts will help transform the kiranas to serve the new set of consumers who are more tech-savvy and want personalized services,” the Flipkart spokesperson added.
The ability of these stores to deliver without a break during the crippling nationwide lockdown has won them much admiration.
“Kiranas that had lost some sheen, thanks to modern trade and online channels, are back in the limelight as they have outperformed online grocery retailers in the lockdown period,” said Samarth Agrawal, founder and CEO of MaxWholesale, a B2B platform that helps kirana stores place online orders for stocks. “Kiranas have proven their dependability and sustainability. You rush to the kirana store when in immediate need of a product which underlines their dependability. Plus, they have not only been storing products but making home deliveries profitably,” he added.
Agarwal said no artificial intelligence can match the kirana shop’s consumer understanding.
“The only missing piece in the kirana story was technology, where companies like ours come in to make them more efficient,” said Agarwal.
The Facebook-Jio deal will enable these stores to deliver products and services by transacting through JioMart, using Facebook’s WhatsApp. “Our focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector,” Reliance Jio said on Wednesday. India’s kirana stores account for 80% of the country’s retail industry, and for Reliance Industries’ Mukesh Ambani, it is a massive opportunity.
“We see the deal as strategically significant for Facebook as it will enable transactions on WhatsApp, giving fillip to its effort to monetize the platform. On one hand, JioMart could enable inventory and back-end supply chain for small shops, on the other, the WhatsApp platform could enable ordering and payment providing seamless customer experience. We do see formidable execution challenges as well as opportunity,” Edelweiss Securities Ltd said in a 22 April report.
Reliance Retail aims to be India’s largest omni-channel retailer through its hybrid online-to-offline new commerce platform, for which it is deploying merchant point of sale (M-PoS) machines. Currently, there are 15,000 digitized stores in the country. RIL plans to grow this to 5 million by 2023. For faster adoption, it is also asking FMCG firms to insist that kirana stores and distributors use its M-PoS.
During his India visit earlier this year, Amazon.com founder Jeff Bezos had pledged $1 billion in new investments to bring small businesses online, courting merchants and the government amid regulatory scrutiny and protests by traders. The investments, said Bezos, will touch as many as 10 million small and medium businesses.
Meanwhile, B2B startups are helping digitize kiranas to enable online ordering, ensure online payments and even deliver goods to shoppers. “In the near future, we foresee all kiranas being part of a select few digital platforms. In a few years, it’ll be difficult to imagine a kirana store without a platform association. This is one of the largest retail and consumer internet opportunities of our times, estimated to be more than $60 billion by 2025,” said Amit Sharma, CEO, and co-founder, at B2B commerce platform ShopX.