Setting up shop: empowering small retailers and kiranas

Small retailers and kiranasform the backbone of Indian consumption with a 98% share in the entire grocery retail business – there are about 12 million of them dominating the segment. There are some practical reasons for the success of these models. First, they are easily accessible and can be found on every street corner. Second, they have a unique knowledge and assortment of locally relevant goods for the customers. These shops are spread across urban and rural India as they manage with fewer stock keeping units in small spaces.

The profound knowledge of the local consumer community allows these small stores to use their limited storage space and create a smart turnover essential goods. The wholesaler acts as the warehouse while they keep stocks indesired quantities. Apart from this, these kirana shops and small retailers provide free delivery in less than an hour with convenient credit facilities for their regular and trusted consumers.

Small retailers and kiranasare a source of employment for millions of local entrepreneurs and workers with minimal skills. They may either prefer to set up shop in their local villages and towns or migrate to other broader parts of the country. These shops are also embracing digitization by implementing online digital payments for both small and medium transactions.

The Goods and Services Tax (GST) has been kind to small retailers with an annual turnover less than ₹20 lakh. They are exempted from registering under the Central Goods and Services Tax Act, 2017.Further, the billing and compliance burden has been eased on them as they don’t have to issue long invoices detailing the prices and taxes for each item under the GST regime.

The Davids of this David and Goliath battle have thus given plenty of reasons why they ought to be prioritized and empowered in our country. To ensure that both sides of the table, the consumers and producers benefit, these shops must be further modernized to keep up with the digital world in a manner where the human connect isn’t lost somewhere in between. There is a need for hyper localization and digitization through point of sale (POS) billing, increased digital payment and back-end integration with wholesale suppliers to meet the demands of consumers. Cloud printing, where mobile applications can scan and issue bills from printers would be the next step to evolve this sector.

Small retailers and kiranasshould be supported by offering them training in assortment section and product placements within stores to improve their markets. This is because the location involving height, visibility and placement of a product can substantially increase margins of sales. There are various shops that work on a credit-based system with their customers and suppliers.  Systematic financial support can be provided to these shops to overcome any mounting debts.

In conclusion

The collective of small retailers and kiranashops deserve their due recognition for the integral power that they possess. The government must be more attentive to these groups to scale them higher up the ladder and improve conditions for producers, consumers and intermediaries involved. It is not about offline versus online in the future but rather how online can complement offline. Both will continue to thrive in different ways. Having said this, the small retailers and kiranaswill immortally be evergreen because of the close human interface involved thereby creating scope for increased economic development. Kirana stores continue to the be the mainstay of Indian consumption and have a personal relationship with customers, who in turn entrust these with their monthly budgeted grocery needs.For this reason, kiranas will continue to succeed and therefore, should be appropriately supported and empowered.

The article has been penned down by Venkatesh K, Chief Executive, Printer Business Unit, WeP Solutions Ltd