Mahadev Waghji Patel ran Choice Mart in an affluent area of Mumbai for nine years. His local customers relied on the store for their monthly groceries, and kept coming in, even through e-commerce players like Amazon FlipkartFlipkartFounded in 2007, Flipkart is one of India’s oldest e-commerce companies and is owned by Walmart.READ MORE became popular in the mid-2010s. Patel put food on the table and taught his children the income from the store.
Two months ago, Patel closed Choice Mart and opened a hardware store in another neighborhood. “It is not possible to deliver for free within 10 minutes,” he says Rest of the world. “The best option is to quit and change jobs.”
Indias Kirana Shops – small shops selling daily necessities that are a staple of almost every urban neighborhood – dominated the country’s retail economy even after modern commerce arrived 20 years ago, largely due to their own efforts to oppose major foreign-owned stores. The mom-and-pop stores fought against Walmart’s infringement; after Amazon entered the country in 2013, they survived collaborate with the online retailer to store inventory and serve as a collection point. They created similar partnerships with homegrown giants such as Confidential Retail and Flipkart.
But the entry of fast-trading companies like Zepto, Blinkit, Swiggy Instamart and Dunzo is proving to be a more difficult challenge. Quick-commerce customers spontaneously place orders strange hoursand for strange things — like get underwear or an iPhone delivered in less than 10 minutes. They value convenience and speed over price.
Zepto
Quick-commerce companies “offer the convenience of impulsive buying with just the click of a button and within 10 minutes,” threatening the survival of more than a quarter of India’s fifteen million kirana stores, says Karan Taurani, research analyst at Elara Capital. , told Rest of the world. The past year, 200,000 kirana stores have been closedaccording to the All India Consumer Products Distributors Federation (AICPDF), the largest retail association in India.
Many kiranas try to retain their old customers by offering home delivery. Rajesh Gupta, 59, has been running a small supermarket in New Delhi for 28 years. “This store has helped me educate both of my children,” he said Rest of the world. Lately, fewer of his regulars are shopping in person. Gupta has been able to retain them by offering free delivery to those who live within a few hundred meters of the store. “We don’t charge a delivery fee even if the order is just a bottle of soda,” he said.
This strategy didn’t work for Patel’s Choice Mart. “It costs Rs 25 on Zepto, and I got it for Rs 20, but it might take my delivery person 20 to 25 minutes to deliver,” he said. “By this time, the customer has canceled the order.” At the height of his business, Patel had twelve employees in the store. Some of them made deliveries, but due to traffic and unreliable parking in Mumbai, Patel could not guarantee delivery within 10 to 15 minutes.
Price was also a concern. When Patel suggested a new product to customers, they said they could buy it much cheaper online, he said Rest of the world. And they were right. Patel himself sometimes bought products online to resell in his store; it was cheaper than buying through distributors in the retail supply chain.
AICPDF National President Dhairyashil Patil said Rest of the world the organization fights for fair competition. The low prices offered by quick-service companies “are causing confusion among customers,” Patil said. “Many of them now believe that shop owners have been cheating them for a long time. In reality, these fast trading companies are burning money to establish a monopoly in the market.”
Zepto was rated at $5 billion from August, and Blinkit at $13 billion from April. Tata’s big basket and Reliance’s JioMart have reduced delivery time from 2-3 hours to less than 30 minutes. Four-year-old Zepto reported a net loss of $158 million in the financial year ending in 2023, according to data from market research firm Tracxn. Blinkit posted a net loss of $131 million in the same period.
In recent months, AICPDF has written letters to the Ministry of Commerce, urging the ministry to implement the Digital Competition Bill, aimed at setting a minimum retail price and limiting excessive discounting. Patil said the Competition Commission of India is investigating fast-trading companies for questionable business practices, among other things owned by dark stores, predatory pricing, disruption of traditional retail distributionAnd do not disclose expiration dates.
Quick-commerce companies achieve higher margins by purchasing directly from brands rather than from distributors and wholesalers, Kushal Bhatnagar, an associate partner at Redseer Strategy Consultants, told me. Rest of the world. The strategy also helps the companies stock newer brands that are not available in kiranas. Bhatnagar said Fast Trade sells a wide range of products that “go well beyond groceries, into categories such as gifts, beauty, home decor and (and) smaller electronics.”
Blinkit, Zepto, JioMart and Flipkart declined to comment.
“These fast trading companies are burning money to establish a monopoly in the market.”
According to a report by Elara Capital, fast-trading companies in India currently earn more than 90% of their revenue from the country’s ten to twelve largest cities. Smaller cities could be next, Patil said. “Our goal is to ensure a level playing field before this unequal competition spreads to other cities,” he said Rest of the world. Quick-commerce services have already started launching operations in smaller cities such as Nashik And Vijayawada.
Culturally, kiranas still have an advantage.
First, they replace and reimburse items for free. Patel said his store, Choice Mart, might sell 100 paper plates for a birthday party, but if only 75 plates were used, he would refund the customer the remaining 25. Blinkit did that for comparison 10 minutes returnbut the policy only applies to clothing and shoes.
Kiranas also offers store credit. PP Patel, owner of Rex General Store in Mumbai, said Rest of the world that many of his customers are domestic workers who do their shopping for their employer, who pays the bill at the end of the month. However, the appeal of this service is waning as e-commerce platforms “buy-now-pay-lateroptions for shoppers with bank accounts. “In five years it will all be over,” Patel said.
In Delhi, some shopkeepers are confident about the survival of their businesses. Seven years ago, Balwant Singh and his mother ran one of five supermarkets on their street in a traffic-choked neighborhood in Delhi. Today, their modest 200 square meter retail outlet is one of two that have been preserved. The area’s low rents have attracted hordes of students and young professionals, many of whom frequent Singh’s store. Over time he has built a close bond with them. “I know their first names, where they work and what state they are from,” he said. “People here don’t buy in bulk; they buy a few cigarettes or eggs at a time, which is not possible online.” He said most of his customers don’t have access to online credit.
Singh, 34, has a business degree and is tech-savvy. He created a WhatsApp group for his regular customers, where he takes orders and offers discounts. “It also helps us better track our sales and stay connected to our customers. I send them greetings at festivals and I even remember some of their birthdays,” he said.
Surinder Singh, 55, owns a supermarket in a New Delhi neighborhood known for its high-rise apartment buildings. He remains optimistic about the future of his company. Many of his customers buy grains from him by weight at affordable prices. “You may see the high-rise buildings, but behind them are small neighborhoods and slums, home to thousands of people who depend on us for essentials such as rice, lentils, oil, toothpaste and soap,” he said. “They don’t use these apps – we are their lifeline.”
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