Kirana Retailer Challenges

Kirana (Grocery) Startup in India is full of Challenges
Indian Retail sector is one of the most unorganized markets in terms of

structure. As it was stated in various studies that India Kirana is run by families
but still in its raw form and diverse way it is still unorganized.
In western and other developed countries we can see that Mom & Pop shops
are still running in their full swing despite merging Organise retail in a big way.
Running a Kirana Store is not an easy task in this semi-modern India. The
economic status of the consumer is shifting from lower to Middle and Middle to
Higher, accordingly, preference is also changing resulting in a change in buying
habits and convenience. In Cities Tier 1 to Tier 3 people has more disposable
income which is finding a way for shopping experience through the class of
Retail. Modern Retail is the shopper's stop for such income group people.
Amid the spread of organized retail,

some disturbance happened in and around these Mom & Pop shops, and day by
day they are losing footfall. Aggressive players in offline retail are Reliance
Fresh, Big Bazar, Dmart, More & Vishal, through more than 100000 Sq feet of
space some has 4 to 5 stores in one city. If I convert space and put mom & Pop
store's size then appx 1000 stores equivalent space they are using in one city
through running 4 or 5 hypermarkets.
Now offline organise retail is making noise, the same way e-commerce is
emerging in a fast way. Walmart and Amazon both giant e-commerce platform is
now deepened their eyes and started mining organic data for increasing ticket
size from Rs.2550 to Rs. 5000/. Despite claiming millions of retailers connect
with them but still, they are not making money. If I talk about Walmart 40% of
business is coming from retailers and but not in proportion of investment i.e.
setting up a Cash and Carry need millions of dollars. The average basket size
should be above Rs. 5000/- per month when one is catering to the whole market
or 70-80%.
" As per Delhi Based " one Hypermarket owner - No one can wipe out Mom &
Pop shops from India even in next 50 years " We have to make our consumer
base and leave them to their consumer base. Why we are not focusing on a
class? Burning money is not a solution. Indian consumers are unpredictable so
do not think about loyalty from their end.
Based on my one-year deep survey in 7 major cities in India and staying hours in
streets enquiring about Kirana retailer's business methodology, Future aspects
and their interest I can predict that coming years are dedicated to Kirana
/Grocery retail and the whole ecosystem will have a centre point i.e. Kirana
Retailer. All will be going to please him to seek precious space for their products.
I can predict based on my deep interaction with thousands of people in 2011 &
2012 that consumer is adapting to changes, they are happy to buy new packed,
clean and quality product. In food products, they are less brand savvy. This will
lead to a revolution in the development of private-label brands in India. It means
there would be a kind of flood of regional and local brands but for them, the only
challenge will remain " Retail space" i.e. retailer, the connector.
So, if am talking more about Kirana Retailer then what is the harm in that. After
all, he is the main connector and channel connecting brands to end consumer,
without pleasing him how can one think about penetrating their brand in retail and
how they will think to reach to end consumer. No one.
I can see the pain point of retailers and I will ask new entrepreneurs to talk about
challenges faced by them and what solution as a business you can provide to
save their business.
Usually, one Grocery stores average size in India is less than 100 sq feet but
here we will talk about mid-size stores doing business of Rs. 5 to 10 Lakh per
month. In this segment, you can find 20% of shops in a City having 300 Sq feet
shop Space. Let's take this figure for our study purpose here.
Let's say about Delhi. Here in Delhi more than 25000 Stores are running in
various vicinity which has a reasonable 200 -300 sq feet size and if we talk about
all Kirana Stores below 100 sq feet then these figures go beyond uncountable,
roughly 110000 Stores are in 50 KM of the radius in Delhi ( Avg monthly
business 3 lakh per store)
These 25000 stores are a major grocery hub for the 1.90 Crores population of
Delhi.
I have seen and individually met more than 1000 retailers and interviewed about
their Business prospects, Challenges, problems and many more even about their
personal life, social life etc. Results were out of box thoughts and surprising that
how these people are managing their routine life. Dealing with more than 150 to
300 products having 1000 to 2000 SKU's and making them fit in their small size
shop, routine creeping discussion with vendors/ salesmen etc and long hours of
hardship makes us think and that's why we could know the basics of their
business.
Before we go ahead Let's figure out their shop :

Now we will talk about the Problems & Challenges a Grocery Store owner is
facing: Based on the personal interview we have gone through various issues
they are facing. A mix of problems and challenges
 Space constraint i.e. Infrastructure Issue

 Improper Product Assortment
 Hygiene issue - Lack of cleanliness
 Poor Time Management in Buying and Sourcing.
 Decreasing Footfall due to shifting of customers either to online or big
retail stores
 Mishandling of Product expiry resulting losses.
 Communication Gap Company to Retailer.
 Competition from large format Retail stores and walk-through stores.
 Change in Consumer Behavior
 Manpower Issue.
 Promotion and Offers not available
 High Density of Kirana Stores in one vicinity.
 Next Generation is moving out of this business.
 Lack of IT, not using computer billing & POS.
 Limited Working Capital.
 Food Safety compliance.
 Do not want to keep records of bookkeeping and due to
 Lack of market knowledge.
 Due to stand-alone status and no apex body representing them to
safeguard their business.
 No Banking facility in terms of Credit line as a retailer does not maintain
books of accounts.
More than 20 kinds of issues they are facing so do you think that they will have a
solution to these problems or is there anyone who says:
Last week I talked with one senior official in Walmart, they are in process of
developing a retailer-oriented model in which they will provide their various
products from their centralized hubs, also planning to line up a credit line with
banks or financial institutes. In terms of volume buying discounts, QPS, and
other offers they already started giving to retailers. The sales team is going into
the market and taking orders from retailers. but still, one big stuck is a credit
facility which they are getting from existing distributors. There are fintech
companies who are there to facilitate channel funding but again they don’t want
to involve themselves in legal paperwork so not interested in avail themselves of
facilities.
I have gone through various analyses and since 2009 I am working on this
project but there I have not found a solution about their Survival. I Mean when
big retail players are opening their stores in almost every corner of the market,
most of the retailers who have money and vision are transforming their stores
into a modern outfits but still, a large population of retailers are underprivileged
and struggling for survival. Now, post covid they are getting major threats from
online commerce.
Major players in eB2B are claiming to empower them but how the mere
centralizing supply chain is not a solution, it will be an option, like a more option
to buy from but what will happen if they are not able to sustain their business.

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Kirana (Grocery) Startup in India is full of Challenges

Indian Retail sector is one of the most unorganized markets in terms of

Amid the spread of organized retail,

Before we go ahead Let's figure out their shop :

 Space constraint i.e. Infrastructure Issue

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