The new rules of the old game: How Indian Kirana is changing to keep ahead of the times.


Indian retail is currently running at its highest speed. It is the largest among all industries accounting to 10 percent of the country’s GDP and employs around 8 percent of the workforce. The rapid digitisation, urbanisation and increase in disposable income have acted as a booster shot to Indian shopper’s appetite and avenues to spend.  The increase in the number of shoppers has also led to a revolution in terms of format and consumer buying behaviour. From stand-alone unorganised retail outlet, to supermarkets, shopping centers and multi-storied malls providing shopping, food and entertainment, Indian retail consumption has come light years ahead.

As a matter of fact, India is a power to reckon with not only in terms of its retail spending capacity but also as the world’s top sourcing destination.  Thus Indians are the suppliers as well as buyers of products and services from across the globe.

Some of the most significant changes due to the accelerated growth of the Indian retail industry have been witnessed in the unorganised offline retail industry. Increasing penetration of smartphones, the momentum of digital India drive, GST and demonetisation have paved the way for digital transformation for India’s most unorganised (kirana) sector. While there are many new players in the retail industry, they still cannot outwit the presence and dominance of the neighbourhood stores.  The factors like proximity, long-standing relationships, free home deliveries, easy return and exchange, credit system and personalised attention on each customer’s needs are some of the advantages a big format retail store cannot replicate.

While the lure of Kirana store withstanding, the small shop owners and kirana store retailers have realised the advantages of embracing the new technology and moving with the changing times. The Kirana stores are now adopting technology to automate and drive customer engagement to keep up with modern trade, discount stores, and e-commerce.

Some of the significant changes in the industry in 2018 are discussed here:

  • In 2018 the retailers will shift their focus from optimising supply side and purchase side, to increase customer engagement. The kiranas will adopt technology to automate supply management, use data to get analytics like customer buying behaviour, fastest moving items and demand forecasts, inventory management etc.
  • The new age kirana owners will focus on uplifting their store image, better use the physical infrastructure and modernise the shopping experience to keep up with the e-commerce and big format retails. Alongside, they will also focus on installing POS machines and smoothen cashless transactions.
  • The retailers will try to increase customer touch points by offering value-added services like scooter insurance, bus tickets, cinema hall bookings, or bill payments, recharge etc services.
  • With a race in discounts and discounted stores, kiranas will start giving itemised bill showing discount offered on the items, any schemes or bundle discounts, customise SMS service to customers on promos and adopting app-based delivery for convenience.
  • The retailers will use data and technology to predict the buying pattern, send reminders and cross-sell and up-sell at the store site.

According to the Indian Council for Research on International Economic Relations (ICRIER), the mom-n’pop stores, or the kirana stores hold approximately 95% of market share. By adapting to the new technology and readjusting their ways of doing business they can ensure that their customers remain with them – this time for better service, new products and same old relationships.