Kirana stores from across India have gone through to fulfill the changing requirements of their consumers while facing a pandemic.
According to the new report by SnapBizz, the majority of Kirana stores have created some system where customers can order via the internet or through an app, in an attempt to safeguard themselves from losing their customers to e-commerce platforms.
The study also shows how in 2020 there was an increase in spends per bill reflecting more items in a bill, price rises and switching to more expensive items due to supply shortage and migration of new shoppers with different shopping habits from modern trade to Kirana stores.
Prem Kumar, Founder & CEO states, “The consumer retail segment has witnessed rapid growth in terms of digitization of MSMEs in 2020. This was fuelled by the current COVID-19 era which brought in new opportunities in the retail sector specially for Kiranas. As a result, over a million Kiranas have gone digital in recent months and their stores have gone online by accepting online payments, ordering supplies online, managing inventory, etc. The technology cover now enables them to leverage their strengths like proximity, personal touch, and flexibility further to acquire new customers effortlessly.”
The report gives an in-depth analysis into food and non-food categories and a clear analysis on the effects of COVID and lockdowns on FMCG selling pattern, availability and pricing.
• The staples categories witnessed a surge in baskets and spends by 20 percent even though the store presence had a marginal increase in 2020 vs. 2019; possibly due to more people working from home and eating out was limited for the greater part of the year.
• Most of the retailers (more than 90 percent) were not supported by distributors in terms of larger credit line or longer credit period; Adding to the working capital problem, more than 50 percent retailers had difficulty in collection from customers. However, overall, the credit bills have remained stable in 2020 compared to the previous year.
• Home deliveries increased and 75 percent stores are working towards going online
• 80 percent of Kirana stores saw an increase in customers
• Banking sector has become very involved in the Kirana eco-system
• Sales were more consumption driven rather than price except for Dals and Pulses. It was observed that during lockdown and till Oct’20, the shopper spends increased significantly, however declined and went to pre-COVID-19 levels post that.
• Overall, the consumer spends increased and this was primarily from the larger outlets than the smaller ones.
• The consumer spends on categories like Snack Foods, Biscuits and Noodles also increased by 25 percent in 2020 and the same trend was noted except for Biscuits where the spends dropped in Nov’20.
• Digital payments were on the rise in 2020, more through payment apps, and a lesser rise through credit/ debit cards which require more KYC formalities.
• There was a spike of 50 percent in the share of spends in the food category in March but now it is coming back close to pre-COVID-19 levels even though it is still 18 percent higher than pre-lockdown days.
• The Kirana stores continue to leverage online ordering apps to cater to the current consumers. The number of consumers that ordered from grocery stores via SnapOrder mobile app increased by 5x as compared to Pre-COVID-19 levels.