Kirana stores turn lifeline during lockdown

The close to 12 million neighbourhood kirana stores that dominate the domestic grocery retailing landscape of India with a 90% market share have emerged stronger during the ongoing lockdown, with people depending on them to procure daily essentials.

Though the online disruption has been hurting their profitability for some time, the kirana ecosystem was seen fighting back to regain the spotlight despite the competitive battleground of supermarkets, modern retail and e-commerce players, said analysts.

During this period, the kiranas also facilitated financial transactions for a large number of people in urban and rural India.

“Kirana stores will remain evergreen as people in India still rely on their neighbourhood kiranas for their daily essential needs. The humble kiranas have become the backbone of the Indian grocery market and have proved extremely durable over the years,” said Arvind Mediratta, MD & CEO, Metro Cash & Carry India Pvt. Ltd.

“During the COVID-19 crisis, Kirana stores have stood tall and they ensured that every household gets their daily essentials. They were and are the lifeline of consumers in India,” he added.

As supply chains were disrupted and migrant workers were unavailable, impacting regular delivery by wholesalers and stockists, the kirana store owners themselves went to depots, markets and suppliers’ places to procure the essentials.

“The biggest arsenal for kiranas is their business model; it is much simpler to set up a kirana shop with lesser stock keeping units (SKU) vis-à-vis a retail store with huge capital cost and inventory,” Mr. Mediratta said.

He said METRO Cash & Carry India has been helping in modernisation and digitisation of kiranas to make them attract more footfalls and profitability.

The kirana network also played a crucial role in enabling financial transactions for the masses during the lockdown.

Residents of high-rise buildings in Mumbai’s Worli and small societies in Worli Koliwada invited retail agents of PayNearby to help them with banking services. Similarly, in rural areas, many people who were unable to travel long distances to conduct transactions or withdraw cash from ATMs, rushed to the kiranas to meet their banking needs.

“In such a situation, kirana stores, especially Digital Pradhans have emerged heros. Armed with AePS and MicroATMs, they have been a saviour to populations faced with a scarcity of ATMs, helping them transact with ease,” Anand Kumar Bajaj, CEO and Founder, PayNearby, said.

“The ubiquitous nature of kirana has given it an advantage over the banking sector. It is important that no matter how much money one has in bank account, unless it is available in hand to make payment, it is of no use,” he added.

“We are conducting an estimate of transactions worth over ₹100 crore daily, with our daily AePS numbers doubling from what it was before the lockdown — from an average of 2.3 lakh to 5.6 lakh,” Mr. Bajaj said adding “Overall, we were able to dispense ₹2,970 crore in April.”

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