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Coronavirus: From retailers to e-tailers! global lessons India's Kirana stores can learn to aid lockdown life

India is unique in the grocery and retail space. Over 12 million independent Kirana (mom-and-pop) stores form a large portion of India's retail network

Chengyi Lin        Last Updated: April 21, 2020  | 19:39 IST
Coronavirus: From retailers to e-tailers! global lessons India's Kirana stores can learn to aid lockdown life
Of late, the Kirana stores have increasingly been engaging through e-commerce and digital solution providers

On March 24th, the central government ordered a national lockdown for 1.3 billion people. The announcement sent shockwaves across the nation, factories were closed, transportations were stopped, and millions of migrant workers tried to return home.

India was not the first to lock down an entire country, China, South Korea, Singapore, France, Germany, UK, among many others have also implemented total confinement to stop COVID-19 from spreading.

Although their extreme measures were effective, a recent resurge of new cases could send nations into a second wave of lockdown. As lockdowns continue, a question arises: How can governments, businesses and communities support everyday life during this time?

Each country has developed innovative responses, based on their unique context.

Also Read: Coronavirus lockdown: 39% jump in grocery sales in kirana stores, says McKinsey

China, the first country to lock down Wuhan, a city of 11 million, then its entire nation, relied heavily on its digital maturity to deliver grocery, fresh food and household staples.

During the lockdown, Alibaba, JD.com, PDD, and MTDP and other e-commerce companies stepped up their logistics and delivery capacities to meet the surging demand.

This digital transformation was not an overnight phenomenon, it has taken China many years. Take grocery and household staples for example. Alibaba and JD.com modernised many mom-and-pop corner stores with integrated digital supply chain, digital inventory system, and mobile payment system.

They expanded their digitalisation efforts to other parts of the retail ecosystem, such as farmer's markets and C2C digital marketplaces, and created an integrated customer experience.

Consumers use a single "super app" for different shopping experiences across multiple categories, both online and offline.

Alibaba and JD.com also introduced new ways of shopping for fresh food and semi-prepared food; Freshippo and 7Fresh are their local supermarket-kitchen-delivery hubs integrated with their e-commerce app.

Also Read: Coronavirus: Order online from local kirana stores! Govt helps digitise small shops

During the lockdown, online orders and delivery with these stores increased from households that had to cook three meals a day. To meet these demand spikes, Freshippo and 7Fresh called on idling workers from other sectors to join their logistic networks.

MTDP, DiDi and others also joined efforts with supermarkets to offer last-mile delivery services.

In the US, while Amazon remains the pure-play e-commerce platform, traditional brick-and-mortar retailers have looked to increase their online presence as well. For example, Walmart has grown Walmart.com. However, in grocery and fresh food categories, US e-commerce still struggles.

In Europe, low consumer demand, lack of a digitally integrated supply chain, old city infrastructure, strict labour regulations are among many factors that contribute to the slow growth of e-commerce penetration.

Encouragingly, there are increasing collaborations between established retailers and e-commerce and delivery start-ups in response to the crisis. For example, the UK government relaxed labour regulation and extended working hours for grocery stores to restock at night.

Also Read: Coronavirus crisis: How to grocery shop safely during COVID-19 outbreak

In France, Franprix partnered with Deliveroo and Carrefour with Uber Eats to meet the increasing demands of customers. Carrefour has innovated by dedicating specific hours for medical workers, elderly, immune-compromised, and other vulnerable populations. Large retailers have also increased their in-store pickup services to make up for the lack of delivery capacity.

India is unique in the grocery and retail space. Over 12 million independent Kirana (mom-and-pop) stores form a large portion of India's retail network and over 90% of the supply chain is unorganised.

Over the last decade, efforts by Walmart and other major consumer brands such as Unilever have focused on improving the consumer goods supply chain in India.

Of late, the Kirana stores have increasingly been engaging through e-commerce and digital solution providers. For example, fintech companies have been competing on digital payment options; large retailers offer digital POS systems that can be integrated into their own e-commerce systems and tech start-ups offer digital solutions from supply chain to inventory to catalogue management.

These efforts have helped transition the Kirana stores to become more modern.

The COVID-19 lockdown puts huge pressure on the groceries, fresh foods and staples supply chain. These everyday items, required daily by 1.3 billion house-bound citizens, need to be delivered with minimal human-to-human contact.

As India continues to fight this crisis, experiences from other countries may offer a few lessons:-

  • Pay attention to your unique retail context. What do Indian consumers need and how can you adapt to the current system to meet these needs?
  • Secure supply chain and last-mile delivery capacity. Plan ahead and secure goods from local, national, and international supply networks. Call on workers from other sectors, collaborate with start-ups and reach out to companies from other sectors to build capacity.
  • Work with the government on policies and regulations. During the crisis, the government could help retailers in securing labour, finance, and even products.
  • Create novel solutions through grass-roots innovation. Engage with consumers and Kirana store owners to co-innovate. India has seen the birth of innovations that are both effective and cost-efficient. Collaboration may generate new ideas that fit India's unique context.

(The author is Affiliate Professor in Strategy at INSEAD, Fontainebleau, France)

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