Modern retailers & eRetailers' new love for Kiranas

While the eCommerce wave is hitting headlines these days, one development that has awakened many eyes to a new fact in the retail industry is how retail giants are tying up with local kiranas or neighbourhood stores to boost their operations.
Why Retailers love Kiranas
While the eCommerce wave is hitting headlines these days, one development that has awakened many eyes to a new fact in the retail industry is how retail giants are tying up with local kiranas or neighbourhood stores to boost their operations.  
Years back we all wondered what would happen if the Walmarts and Ikeas enter India and take the retail sector by their side. Both these retail giants have made inroads into the country and have become operational too, but despite that, Kiranas in our country have not lost their sheen. Realising this, our own modern trade players including eCommerce and physical retail players, have thought of joining hands with these stores. While Walmart has an objective to uplift the Kiranas by providing a Cash and Carry-B2B format, the likes of our home-grown brands like Future Group and Reliance are not leaving the path untravelled. 
What data says?
As per Nielsen, modern trade that accounts for seven per cent of the market size has witnessed a sharp deceleration in growth rate to 5.4 per cent in 2014 from 32 per cent growth in 2012. In comparison, Kiranas, which control 74 per cent of the market, grew 7.1 per cent despite a large base.
Reason being our new-age retailers are now wooing the mom-and-pop stores for support to reach consumers or to partner with them for last mile delivery. For example, online grocery stores such as BigBasket, LocalBanya, ZopNow, EkStop, AaramShop, MyGrahak, VeggiBazaar, Fresh N Daily and Farm2Kitchen are experimenting with different business and delivery models. These retailers taking cue from the Kishore Biyani led Future Group, are now seeking partnership with Kiranas to scale up or to widen reach. 
Speaking on the same, Abhinay Choudhari, Co-founder, BigBasket.com said, “Kirana's wide network , physical presence and proximity to end consumer presents an opportunity to the pure play e-tailers to forge a win-win partnership with Kirana's. Kirana stores provide an alternate for home delivery and can act as order collection points for e-tailers customers and in the process benefit from additional revenues by providing this facility to e-tailers"  
Although when contacted on the topic, Vivek Biyani, Director-Future Group, said, “Let them comment who have sought such partnerships on this”.
Interestingly, his uncle has quoted in a famous business daily of having partnered with 700-800 kirana stores and, in fact, having invested in the training of the Kiranas as well.
Damodar Mall, CEO, Grocery Retail and Reliance Retail also said, “Nothing to share on the Reliance plans, on this front at the moment.”
When Amazon did it
Amazon India in April last year launched ‘Kirana Now’ by using kirana stores as entrepreneur-partners across the city to serve as its delivery points.
As per Amazon country head, their vision is to be the most customer centric company and enable customers in India to buy anything and everything they want online, anytime and anywhere. Amit Agarwal, Vice President and Country Manager, Amazon India at Amazon.com informed in a detailed interview, “Our vision is to transform and empower the growth of millions of small and medium businesses around the country in the digital economy. Essentially we want to use our investments in technology and innovation to transform the way India shops and the way India sells.”
He informed further, customers can discover this selection by browsing to the ‘Kirana Now’ store within the Amazon.in site via a mobile Internet browser. Eligible products are clearly marked with the Kirana Now badge in search results. Customers simply browse the Kirana Now category; add products to their basket directly from the search pages, and checkout as usual. Customer orders are assigned to the next delivery window, usually within 2-4 hours and displayed at the time of check-out. The grocery stores then pick and pack the items for each cart in a Kirana Now bag. Customers get the convenience of knowing the selection is available, they can order online anytime, anywhere and can opt for a variety of payment options and their products are delivered to them at their doorstep.
Rationale behind
No doubt, partnership brings shared-cost benefits and getting advantage of your partner’s reach and visibility. In this case also, scaling up an e-grocery business is capital-intensive, experts say. And partnerships help scale up faster and with less investment. Kiranas are close to consumers and can reach consumers faster and cheaper.
On the other hand, kiranas cannot say no to fresh business that large retailers and online stores can feed them. "All formats can flourish together, but it's low-cost, last-mile connection to the consumer and his knowledge of servicing the Indian family is something unique to the kirana," explained Damodar Mall.
Clearly, the bond that as consumers we connect with our neighbourhood stores is unmatched, and here, the Kirana stores distinguish our nation as a truly shopkeeper’s nation.
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