The Corner Reaches You

The New Eight-Fold Path

1. Today’s young customers surf while in shops, comparing prices and range
2. Kiranas being enabled to let customers buy online but pay later, at the store
3. Kirana-based online shopping devices are being developed by tech start-ups
4. For a new look, the L-shaped counter is giving way to aisles, allowing touch-and-feel
5. Better brand visibility is a growing revenue stream
6. Customers can be contacted through WhatsApp, Viber, and store-centric apps
7. Traders are a BJP vote bank. Retailers are seeking govt protection from e-commerce
8. Umbrella groups of traders are launching portals, to feature brick-and-mortar members

• $550BN Indian retail market

• $45BN Organised retail’s share in this market

• 57.7MN Retail businesses

• 14.5MN of which are computerised

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Over the past few years, the kirana store owner, oft-caricatured as a baniyan-clad, penny-pinching, portly uncle type, has been a symbol of resistance for those opposing FDI in retail. His street-fighting set, the delivery boys, had to be protected from technology’s heartless, job-denying progress at any cost. All were enemies: big homespun retail chains, international retail traders WalMart and Carrefour knocking at India’s doors, and pro-consumer lobbies of several governments.

Today, the kirana, further down the road of a shift in generations as well as consumer taste, is eager for change. An impatient consumer, bedazzled by the variety on display in the hypermarts of Singapore or Dubai, is forcing the younger lot of kirana store owners to modernise—to get with it or get out.

“The kirana has undergone an identity shift, more marked in the top 20 cities but spreading everywhere,” says Niladri Mukherjee, a product design entrepreneur from NID, Ahmedabad. After the 2008 crisis, Mukherjee realised the vast, untapped opportunity in unorganised retail. “The kiranas want desperately to modernise. They want to look new, different, modern. But they are confused about how to get there,” he says.

Mukherjee has now sought a patent for what he came up with at Glue Design, his design outfit—QuikTile, an easy-to-use, almost DIY fix that can spruce up any kirana in a mere 48 hours, with effects that can last 50 years. “The world is cluttered, India even more so, and the kirana still more,” says Mukherjee, who is in talks for venture capital funding. The interlocking tile system in soft steel, he says, can bear loads, be easily moved, and helps in organising shelf space flexibly, letting kiranas display merchandise that attracts brands.

“The kiranas are nervous but fighting back. The mom-and-pop guy has to be scared. Or he won’t survive,” says Vijay Singh, who runs aaramshop.com, which has developed an app-based model to connect local grocers with consumers.

Singh often suggests cosmetic changes to corner stores in his network. These alterations now go hand in hand with new services like home delivery, app-based orders and even independent corner store websites. Just replacing the conventional L-shaped counter with a desk or open aisle can lift sales by 20-30 per cent, aaramshop.com has found, after working in 52 cities with around 45,000 stores. The typically cagey retailers are ripe pickings for tech company promoters, once they see such an uptick.

It’s a vastly different retail market that the customer scans today. What used to be a website is an app. What used to be a marketplace is a website. “And what used to be a kirana store is still that, but morphing into an infinite aisle-using technology,” explains Kumar Rajagopalan of the Retailers Association of India (RAI).

An old-style kirana store in Lucknow. (Photograph by Nirala Tripathi)

The kiranas always packed a punch—remember, they alone clock profits in Indian retail. So much so that RAI and others acknowledge them as real challengers to modern retail’s convenience stores, malls and arcades. Last year, RAI researched 120 independent retailers in Delhi, Mumbai, Surat and Chennai, and found them to be pretty quick on their feet—an overwhelming 70 per cent were already adopting e-commerce.

That adaptive quality is what entrepreneurs such as iPay’s Krishna Lak­amsani in Hyderabad count on. iPay has developed a “digital storefront” for kirana stores to enable  customers to place online orders. The kirana instals a small iPay device for browsing products which are not available at the kirana. The deliveries arrive in a day or two and payments are at the kirana itself.

“Every minute, 70 people are buying something on our platform,” says Lakamsani. At first, nobody understood what he was getting at. “Today,” he says, “we are building a WalMart without holding an inventory or shop.” The iPay model requires no literacy, nor a credit card or bank account. “Our business is based on the fact that people trust their corner store. Also, nobody knows customers better than the kirana, so we know precisely what products to offer,” he says.

Abhijit Bose, who runs ezetap.com, a mobile Point of Sale payment company, says such models are here to stay. “There is always going to be a large section of shoppers that’s partially offline and online.” The model is called ‘assisted e-commerce’, where a device or technology overcomes a limitation, such as lack of literacy, or lack of payment options. In the process, it makes the kirana’s customers more “sticky”—likely to be retained.

Yet, all this is not confined to cities. “Rural customers see the same TV ads as urban customers but have higher aspirations. If something they want is locally unavailable—that’s where we step in,” says Sri­dhar Gundaiah, founder and CEO, Sto­­­­reKing, an “assisted e-commerce” firm catering to rural customers. Their app­-­based model works even without a net connection and takes orders only after payments have been made. It curre­ntly handles 8,000 shipments daily, man­­aging its own inventory and wareho­uses, after sourcing products from Ban­galore. “The e-commerce guys want to sell through our platform, and we’re looking at options,” he says. “The local retailer is smart and enterprising, particularly the new generation. That’s why he will always be kingmaker in India.”

With all these changes afoot, the war between traditional and modern retail is heating up, and it’s hard to say who will win. Today, of India’s 5.77 crore retail businesses, only 25 per cent use computers, according to a 2013 NSSO survey. “We are dead set against FDI in retail,” says Praveen Khandelwal, secretary-general, Confederation of All India Traders (CAIT). “It is the government’s responsibility to modernise trade. What’s the point of e-governance and e-commerce if your traders don’t even have PCs?”

Earlier this month, a CAIT delegation was in Nagpur, meeting RSS leaders including Mohan Bhagwat, to express their strident opposition to FDI and e-com­merce. This umbrella association of around 20,000 trader groups has dec­ided to, willy-nilly, launch their own por­­tal, to feature only brick-and-mortar members. They hope to reach customers through delivery boys, who will, possibly, carry swipe card machines. A mega lau­nch is slotted in Nagpur in August. “Mr Bhagwat has made it clear that the RSS will not interfere in government policy (on FDI). But if government pushes FDI, it won’t be surprising if RSS takes to the streets against them,” says Khandelwal.

Even PM Narendra Modi has asked retailers to adopt technology and modernise. The CAIT portal is perhaps a reaction to that. No more than five per cent would have a web presence, CAIT estimates. Therefore, it’s more likely that the traders are a worried lot who fear, in particular, a replay of last year’s festive season. Droves of shoppers had then migrated internet-wards, and the impact was felt by brick-and-mortar stores in 24 sectors including phones, electronics, watches, gift items, personal care, footwear, luggage and FMCG. As Khandelwal says, “We don’t want to be e-commerce players but we are forced into it. Or else, we’ll die before the next online discount is announced.”

By Pragya Singh with Ajay Sukumaran in Bangalore