Kirana stores: Where ‘Real India’ shops

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June 3, 2020

Written By Priyanka Nair

Brand Equity decodes kirana stores’ unique brand of service on the retail frontl ..

 A recent report in The Economic Times stated that leading consumer goods companies said over 600,000 kirana outlets may have closed during the lockdown.
A recent report in The Economic Times stated that leading consumer goods companies said over 600,000 kirana outlets may have closed during the lockdown.

When the first lockdown began, Kochi resident Lata Chellappan’s first call was not to family members in other cities but to Family Stores, her neighbourhood grocer. The 54-year-old housewife made the “panic-call” to stock her home with essentials from salt to soap. Bags full of supplies were delivered to her doorstep within two hours. By week two of Lockdown 1.0, regular customers of Welcome Stores in a South Mumbai locality began receiving daily WhatsApp lists and photos of available items. In some cases, these “live lists” shared by the owner were personalised based on customers’ purchase history and present needs. For some pasta sauce was on top of the list, for others it was dosa batter. No machine algorithm was powering it.

Family Stores, Welcome Stores, Prabhu Stores, Bansal Store, Apna Store, and over 12 million more small retailers like them are classified as ‘kiranas’, mom-and-pop general and grocery stores that are found on every pakka and kaccha street in the country. Most are no more than holes in a wall, many are disorganised and dimly lit, and a few upgraded ones have brighter lights, CCTV cameras and aisles wide enough for one plus basket. Together they account for roughly 95% of India’s over $500 billion food and grocery retail market.

Over the past three months, kirana shops have been on the retail frontline of the fight against Covid-19, helping millions of Indian households wade through a difficult lockdown and dramatically altered daily lives. The kirana’s brand of service, and their adaptability and agility, has won customers’ trust and wallets. In March, consumer spends in kirana stores increased by 40%. Meanwhile, consumer goods companies doubled-down on their efforts on this retail front and flocked to kiranas for their spectacular reach and hyper-local nature.

Despite restrictions on movement and disruptions in supply chain, kiranas somehow managed to meet customers’ needs. A few kirana shop owners BE spoke to told us that in the early weeks of the lockdown when transportion services were hit they made several trips to godowns in private vehicles to bring ‘maal’ (goods) to stores, personally. Because all that mattered to masked customers waiting at the till, was a quick, efficient and successful shopping trip. But an air of familiarity in a time of fear goes a long way in reassuring people and earning their trust and loyalty. Kirana store owners personally notified regular customers when goods they needed were available. If they had a minute to spare, they enquired after elders and very young customers who stopped visiting stores. Despite manpower shortages, they started special delivery services for older customers who couldn’t leave
their homes.

Sunil D’Souza, managing director, Tata Consumer Products, says, “The kirana store’s success at this time also comes from the connect and trust it has managed to create with consumers. There is an aspect of familiarity and personal service, which is reassuring to consumers during this period of uncertainty.” This proximity to people has made kiranas a treasure trove of insights, helping companies “quickly read consumer trends and changes in buying behaviour,” as D’Souza puts it.

People shop differently in kiranas. For starters, after panic buying and hoarding subsided, many returned to old shopping patterns such as buying based on day-to-day needs. In a survey conducted by a market research and insights firm, Velocity MR, more than two-thirds of 3000 respondents said they find local kirana stores ‘safe’ to buy groceries followed by online stores, during
the lockdown.

For consumers today factors like availability and affordability trump many pre-Covid purchase parameters, and that’s fast-forwarded companies’ plans in recent months. In March, Godrej Consumer Products began producing more Low Unit packs (LUP) – soaps at `10, `15 Mr. Magic handwash, `25 powder-to-liquid format Protekt sanitiser, and `1 mosquito repellent cards. Companies like ITC and CavinKare put hand sanitiser in sachets, priced at half a rupee and a rupee, respectively. Often, in smaller kiranas, these kind of products double-up as decoration as they hang on shop-fronts like party streamers.

Sunil Kataria, CEO – India and SAARC, Godrej Consumer Products, says, “Kirana stores operate as an integral part of the local community. They build their business basis the relationships they create with local residents. In recent years, modern trade stores have definitely had an impact on kirana business. But we have seen many small retailers redesign and transform their stores to offer a better shopping experience to their customers.” Kirana stores account for nearly 65% of Godrej Consumer Products’ urban retail business.

The digital transformation of the kirana business that has been underway for the past few years was accelerated in the past three months, bringing more kiranas online, making buying and selling more efficient, digitalising book keeping and inventory management.

For German B2B wholesale player, Metro Cash and Carry, which entered India in 2003, kiranas are a major “focus segment” says chief executive Arvind Mediratta; “Kiranas have demonstrated true entrepreneurial spirit, seeking innovation and continuing to improve their services,” he says.

RS Sodhi, managing director of GCMMF (Amul), tells Brand Equity that kirana stores not only help them to understand changing consumer behaviour but also give them a peek at the way business is done on the ground. “They are the ones who will give you real insights that can help your brand strategies,” says Sodhi.

Devangshu Dutta, chief executive of Third Eyesight, a consulting firm focused on retail, says, “Brands should understand that this is the channel where they can garner visibility and build loyalty.” It’s where the real India shops, and that’s where brands can mine data that matters right now, he says.

But for how long can kiranas be a lifeline to real India when they themselves are running out of air?

A recent report in The Economic Times stated that leading consumer goods companies said over 600,000 kirana outlets may have closed during the lockdown, “hurt by a liquidity crunch or the return of owners to villages, and fear that most of them may not reopen.” Could apna store be next?

The Kirana Catch

Sunil D’Souza, MD & CEO of Tata Consumer Products

The kirana store’s success at this time comes from the connect and trust it has managed to create with consumers. There is an aspect of familiarity and personal service, which is reassuring to people during this period of uncertainty.

Sunil Kataria, CEO – India and SAARC, Godrej Consumer Products

The modern trade stores have definitely had an impact on kirana store business. But we have seen many retailers redesign and transform their stores to offer a better shopping experience to their customers.

Arvind Mediratta, MD & CEO, METRO Cash & Carry India

The kirana stores have set a benchmark for independent businesses. Not only do they understand the demands of their customers, but they have time and again upgraded themselves to stay relevant and become accessible to a wider customer base.

RS Sodhi, MD GCMMF (Amul)

Kianas not only help you to understand changing consumer behaviour but also give you a peek at the way business is done at the ground level. They give you real insights that can help your brand strategies.

Source: brandequity.economictimes.indiatimes

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