Is Quick Commerce Causing The Death Of Kirana Stores By A Thousand Cuts?

As of 11th November 2024, what’s going on in India’s entrepreneurial ecosystem?

If you transported an Indian consumer living in 2014 to 2024, you’d probably blow their minds. Look at the degree of innovation around us. Maybe, we’re so busy living in a world that’s moving so quickly, that, to some extent, we’re not appreciative of how much things have evolved around us. 

Take quick commerce, for instance. India has Zepto, Blinkit, Swiggy Instamart and more. Q-comm’s been doing so well in India that it’s said to be valued at close to $3.4 billion in 2024 and is projected to hit close to $10 billion by 2029.

But, does innovation and this penetration of technology in India come at a cost?

Kirana stores seem to be a core part of India’s social fabric for eons. There’s said to be about 13 million of them in India. But, they seem to, now, be facing a mid-life crisis.

According to the AICPDF (All India Consumer Products Distributors Federation), around 200,000 kirana shops have shut down. And why? Because of the rapid rise of quick commerce. If a quick commerce platform could be a digital disruptor & deliver groceries and essentials in about 15 minutes, then that might make it powerful enough to eat into the market share of these traditional kirana shops. 

It’s said that 45% of the kirana store closures were in metropolitan areas, 30% of the shutdowns were in Tier-I cities and 25% of them were in Tier-II and Tier-III cities. General trade distributors have reported a significant month-on-month decline in sales by 25% to 30% since July 2024. When there’s a festive season, sales are not supposed to plummet generally. That means there’s a lot of unsold inventory not leaving the shelves.

The q-comm platform’s able to make those deliveries in a short period of time by leveraging hyperlocal dark stores and a fleet of delivery riders on standby. To some extent, it’s, almost, spoiling the modern consumer who gets what they want and when they want at the click of a button. No need to ever leave home.

On top of the convenience aspect, there’s deep discounting and predatory pricing, which these platforms may be able to engage in with the financial backing they have. Cash burn to establish dominance. It’s a cool move.

A kirana store might not be able to match some of those prices. That might hurt the customer base and profitability of kirana stores a bit. Of course, the discounts are not sustainable in the long run for q-comm platforms, but the idea might be to eliminate competition, like the kirana stores.

Is this why the AICPDF filed a complaint with the CCI (Competition Commission of India) accusing Blinkit, Zepto and Swiggy Instamart of anti-competitive practices? The body, also, alleges that the dark stores of these quick commerce platforms intentionally bypass inventory-based e-commerce regulations.

Though, in November 2024, a coconut seller decided to invoke some interesting marketing to advertise that his coconuts were cheaper than the ones you’d get on q-comm platforms. Though, one might wonder whether the coconut seller would be delivering for free, as well.

But, is it a harsh reality that kirana stores might not be able to fully deal with the evolving preferences of a consumer in 2024? Maybe, the onus is on the consumer to use the services of the kirana store. When innovation is taking place, maybe, lightbulb companies would be a threat to candlemakers.

Is all lost for kirana stores? It’s not like they’ve stayed regressive. They’ve adapted and been resilient, as well. You might hear Bollywood performer Amitabh Bachchan’s voice at each of these stores, since many of them have adopted digital payment solutions. They might even be using WhatsApp to take orders. Plus, they may have, even, gone the home delivery route during the COVID-19 pandemic and after. Or would the kirana stores explore partnerships with these q-comm platforms? But, that could affect margins. Could these kirana centres be paid to be the new dark stores for these online platforms? It’s game theory: going from competition to collaboration.

So, the question is this: in the age of instant gratification, where are you getting your stuff from?

And as of 11th November 2024, now you know.