The humble kirana store owners during the COVID-19 lockdown have proved to be the most efficient in terms of ensuring that consumers got access to essentials. When biggies such as Amazon or BigBasket were unable to deliver due to manpower shortage, it is the local store owner who went from one distributor to the other, picked up inventory and ensured that his store was well-stocked. The modern retailers have realised that they can't ignore the local kirana stores anymore and this conviction has resulted in interesting partnerships between the organised retailers and kirana stores during the coronavirus lockdown.
The most recent initiative is Amazon's 'Local Shops In Amazon' which allows not just kirana stores but also local apparel, furniture, sports and appliance stores to be part of Amazon's network. So, if a consumer is searching for grocery items or even a product like an inverter, the search will also give details of retailers in the locality of the consumer which sell invertors. If the consumer clicks on the local option, the local retailer would directly deliver the product to the consumer. Details of the value-added services offered by the retailer, such as product demonstration or installation support would also be flashed. Amazon, says, Gopal Pillai, Vice-President, Seller Services, Amazon India, has been running a pilot with over 5,000 offline retailers and local stores for the last six months. "We expect this to be a win-win, as customers benefit from access to greater selection, faster deliveries and additional value-added services and local shops can transform into digital stores," explains Pillai.
Most local retailers, especially the kirana stores owners were not so long ago, apprehensive about going digital. When asked if they liked to order their inventory from an online service provider, the instant response of most kiranas was they didn't understand online business models and they preferred the traditional distributor coming to their stores and taking orders. Reality, however, has changed since the outbreak of coronavirus. With distributors unable to deliver inventory due to manpower shortages and consumers not stepping out to shop as often, business of most kiranas has got impacted. "A large part of a kirana's revenue comes from impulse shopping, which has stopped as consumers are not stepping out as much. Kiranas are looking for answers as to how they can increase their revenues," points out Amit Sharma, CEO, ShopX. "We have been doing lot of webinars with local retailers and I see an increasing propensity of retailers wanting to future-proof themselves by being part of platforms such as ours."
ShopX has recently rolled out an initiative, Retail 360, as part of which it is getting brands to directly sell to as many as two million local retailers through it its platform in the next couple of years. "Digitisation of the retail value chain was already on its way and COVID has accelerated the trend," says Sharma.
Arvind Mediratta, CEO, Metro Cash & Carry, says that his company is doing more business with kirana stores now than it ever did. The company has been encouraging kirana store owners to order inventory through its online app and has been offering them a 1-1.5 per cent incentive on the total bill for every online order. "We rolled out our online app on April 11, and we have already seen a five-six time increase in order. The last two-three days have seen a hockey-stick like growth."
The Government of India in partnership with 12 FMCG majors is also set to empower the kirana stores. Starting April 28, one million Suraksha Stores would be rolled out across the country, as per the Government's COVID-19 prevention norms. It will be the local kirana or chemist shops that will converted into sanitised Suraksha Stores. Each FMCG company has been assigned states where it would manage the Suraksha Stores. ""Our purpose is make the kiranas happy, so we have also volunteered to participate in six states, Karnataka, Telengana, Bengal, UP and Delhi," says Metro's Mediratta.
Earlier this week, there was also news of social media giant, Facebook, picking up a 10 per cent stake in Reliance Jio, for Rs 43,574 crore. The main focus of this deal is to introduce digital solutions for 60 million micro, small and medium businesses, 120 million farmers and 30 million small merchants, which would include the kirana store network. The FB-Reliance deal is likely to see the launch of a Jio-WhatsApp super app which will enable people to not just socialise, but also shop, consume entertainment, as well pay digitally. The Covid-19 lockdown has resulted in lot of kirana store owners taking orders on WhatsApp. The FB-Reliance deal is likely to enable these local stores to even do billing and receive payments on WhatsApp.
The new normal will surely see more empowered, digitally-enabled kirana stores.