JioMart, Dunzo, Swiggy and likes want to ride the trust earned by India’s kirana stores during the lockdown
- With people not venturing out of their homes due to the lockdown and then the fear of coronavirus, kirana stores are turning to partner with online delivery platforms.
- Hyperlocal delivery platforms and e-commerce companies like
JioMart, Dunzo, Swiggyand Zomato have been ramping up their offering from kirana stores. FMCG companiestoo can leverage the kirana storeloyalty to push their brands as it brings new users as well as the chance to offer new products.
The kirana stores, on the other hand, are also lured by the digital platforms. An increasing number of store owners have embraced the advantage of home deliveries via these platforms but are wary of losing margins.
Kiranas to the rescue
When the coronavirus lockdown began in March, a panic struck across the country with people hurrying to their nearest kirana store to gather groceries. Four months later, consumer spending at kirana stores are still 22% higher than pre-Covid levels. “They have been winning the loyalty of the current consumers and acquiring new ones,” said Prem Kumar, Founder & CEO of Snapbizz.
Kirana stores – not just a stone’s throw away but also a button away
People not venturing out of their homes has not just hurt crowded department stores, even corner shops on every street have seen fewer customers. This is a fertile ground for technology, particularly online orders and home deliveries.
According to a survey by EY India, 40% of respondents (kirana store owners) said that they want to partner with online delivery and supply platforms as they feel it can help them grow and tide over in these testing times. The report further said that it's time for FMCGs, large retailers and financial services companies to “recognize that the kirana store is the new local touchpoint and their conduit into the daily life of a trusting consumer.”
“As we move from now to next and beyond this crisis, the new level of growth for kirana stores will come from partnerships and symbiotic relationships,” said Shashank Shwet, Partner, customer experience and design thinking, EY India.
The opportunity for e-commerce and FMCG brands
And here’s where the likes of Dunzo, Swiggy Stores and Zomato come in who are pushing for hyperlocal deliveries. Zomato and Swiggy, who have both been impacted due to the restaurant shutdown during the pandemic and people’s aversion for ordering online, have latched on to the grocery delivery business swiftly.
Even the likes of PhonePe, who have so far largely been a payments player, or NoBroker, a real estate platform, are ramping up their operations to include deliveries from the users’ nearest kirana stores. Reliance’s JioMart has spread to over 200 locations across India, in the middle of the pandemic, partnering with kirana stores and delivering to users’ doorsteps.
“India will leapfrog from being a retail-led ecommerce model to an offline to online one where shopkeepers goods are delivered,” Paytm founder Vijay Shekhar Sharma had said in an earlier interview.
FMCG companies like Hindustan Unilever and Marico, too, can leverage the kirana store loyalty to push their brands as it brings new users as well as the chance to offer new products. “79% of respondents in non-metros and 50% in metros state that there are new consumers coming to their store post the lockdown period,” said the EY survey.
The survey said that at least 69% kiranas in the non-metros were able to sell alternative brands to their customers, and this could turn out to be a great opportunity for new brands.
Will they survive the discounts?
One of the major factors of e-commerce to hit kirana stores were the deep discounts offered by e-commerce players to gain users. And there’s also another big price to pay – commission price. EY’s survey believes this could still be a hurdle for kirana stores as the partnerships with online players come at a high cost and are not yet profitable.
What’s driving these stores to online is the customer's willingness to pay digitally. As social distancing stays on as the new norm, digital payments have been on the rise.
“Covid-19 is forcing sectors to digitize as businesses can’t be closed for a long period of time and social distancing is here to stay, for the next 12 months at least. Small and medium businesses and consumers are beginning to realise the friction and frustration involved in handling cash after having experienced seamless digital payments,” said Harshil Mathur, co-founder of Razorpay.
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