Kirana Store a Technology Shop Too
June 23, 2020
8 minute Read
For as long as India can remember, Kirana stores are the go-to destinations for groceries, quick snacks, stationery, healthcare, beauty care, clothing, and many other products. From a child purchasing a pen/pencil to a family purchasing their monthly provisions, these stores are hubs for multiple trade transactions in a day.
“12 Million Stores & $700 billion market size – the strength of Kirana.”
They control & command 90% of the entire retail market. For quite long, National & Global retail giants have tried to compete with Kirana, and they have fallen short. And now, they are looking at ways of collaboration rather than competition. But what is the secret to their success?
Trust – The Epitome of Success
The most important aspect of the Kirana trade is the trust established between consumers/shoppers and store owners. Just a month of continuous trade between the two parties establishes a relationship that remains intact for months, years, and even decades. Almost every Indian, regardless of their income class, can relate to below experience:
Bhaiya/Anna, How much is it?
3 kg rice, two bathing Soaps, one cigarette pack, two potato chip packs, 1-liter coca-cola, and two pens. Bill is INR 450.
ok, write it in the account, will pay it on the 1st.
ok Sir, total bill till now is INR 2500 including this one.
This scenario is a common occurrence when regular shoppers make their purchases.
Bhaiya/Anna or Didi/Akka, which means brother or sister in the Indian dialect, are titles used to address these shop owners, more than Sir or Madam. This is the level of trust and loyalty experienced at Kirana, which can never be found or established at any big box store. It’s no surprise that many Indian families purchase goods from the same store for multiple generations. Moreover, that’s why the Kirana trade dominates the industry with a 90% market share.
Kirana Stores – What are they?
It’s essential to understand Kirana at its fullest. Kirana stores, also known as the unorganized sector of the retail industry, are the Mom & Pop Stores of India. They belong to the traditional channel of the retail trade. Yes, most of them are run as family businesses or by individual entrepreneurs.
“Based on popular belief and in general, most pan shops and general stores are considered as Kirana. However, the term itself is broad and represents various types of retail trade.”
If you have to classify Kirana stores or the unorganized sector as we call it, they can be classified as below:
Pan Shops General Stores Dairy Local Bars & Wine Shops Mini Markets Clothing & Apparel Stores Book Stalls Medical Shops Mobile & Electronic Shops Jewelry Merchants & Pawn Brokers
You can find these shops in every street corner, in any Indian city, town or village. They are most famous for selling cigarettes, tobacco products, tea/coffee, cookies/biscuit packets, sweets, snacks, beverages such as soft drinks, and of course, the exotic leafy Indian dessert called Pan. Do not be surprised if you find a BMW owner stepping out of his car to make a few purchases here.
These stores are the ideal spots for the monthly provisions of a family. From pulses to toiletries, you can find all types of FMCG products here. However, the number of brands available to purchase are limited, and brand loyalty is very high at these stores. For example, you will find people buying the same brand of detergent for over a decade.
This destination is not so different from its peers in the other parts of the world. Though most dairy shops belong to specific brands, the shop owners sell products from other brands such as Ice creams, kulfis, and milk-made sweets. These stores also act of wholesalers, as they deliver products to general stores where they can sell them.
Local Bars & Wine Shops
Be it a corporate professional or a daily-wage worker; they all come here to buy alcohol. Popular alcoholic beverages purchased here are beer, whiskey, and rum. They have different names in different states. Downsouth in Tamil Nadu, they call them TASMAC shops. In Andhra Pradesh, they call them Wine Shops. Though the names change, the purpose remains the same.
These stores can be compared with their western siblings because they are small organized stores, probably with a couple of aisles and limited products. It gives the consumers or shoppers a self-service opportunity and a similar feel of a supermarket.
Clothing & Apparel Stores
People of all ages go to these shops for their clothing and apparel needs. Clothing shops include readymade clothing retailers and garment traders, where people can choose the type of cloth then get it stitched. Unlike big box stores where higher markups are evident, shoppers here can get suitable clothing for reasonable prices. Fancy stores, also known as cosmetic stores in a few states, are mostly for ladies where they buy cosmetics, inexpensive jewelry, and other beauty products. Footwear stores sell footwear as well as belts & wallets.
From books & stationery items to DIY craft items, bookstalls in India are favorite destinations for students, stay-at-home moms, and also DIY Youtubers. Many a time, these stalls act as libraries for enthusiastic readers due to the wide assortment of books.
Medical ShopsMedical shops sell medicines and drugs of all kinds. Local doctors often tie-up with these stores and recommend their patients to them. They also provide sanitary wear for babies and adults, including dietary supplements.
Most millennial and gen-Z entrepreneurs, who want to own their shops, prefer this trade. Mobile sales, repairs, prepaid recharges, household electrical appliances, laptops, and desktops are some of the items that are sold in these shops.
Jewelry Merchants/Pawn Brokers
Jewelry business, as everywhere else in the world, is a lucrative business. In India, only a few sects of entrepreneurs are generally involved in the jewelry trade. Most of these sects have been in the same line of business for over 3-4 generations. The same applies to pawnbrokers as well. While most pawnbrokers are money lenders, they are also jewelry, metal, and pearl merchants.
Unorganized Trade Targeted by the Organized Due to this broad reach and high potential, Kirana stores have become monetary/lucrative targets for large corporations such as Reliance, Google, Amazon, and Walmart owned Flipkart. While some stores act as suppliers for product procurement to these corporates, the others have started using their electronic platforms for their daily business.
These days, in almost every Kirana store, you can find a UPI transaction availability through PayTM, GooglePay, AmazonPay, and PhonePe. New portable POS machines, created by these large corporations for Kirana vendors, have become a staple and improved the businesses of these local retailers.
While corporations have their agenda around innovations, owners of these small stores are delighted with the efficiency these tools bring to their trade. CPG & FMCG can now track their product movement at these stores effectively, which implies that applying retail execution strategies at Kirana is no longer a far-fetched ambition.
The Future of Kirana
The vast ocean of Kirana spread across the Indian sub-continent is yet to be explored to its fullest. Though big-box stores and retail chains have entered the retail space, their ability to compete with the unorganized & the Kirana market will continue to be meager.
Digitization of this trade channel at its fullest will be achieved shortly. Because of that, for the upcoming decade, we’re quite sure that Kirana will continue as a shopper favorite. So, now the question that lingers for CPG companies: “How can we get a share of this massive market?”