Is Kirana the Answer to India’s Retail Dominance?

The Indian retail sector has become a battleground for numerous organised retail players (Sachitanand 2020; Pathak and Tandon 2020). According to the Indian Brand Equity Foundation (IBEF), as of 2018, India’s retail sector was worth $950 billion and was expected to reach $1.1 trillion by 2020, with the organised retail sector and e-commerce gradually making headway. India’s traditional retailers, the kiranas (mom-and-pop stores), continue to dominate the scene representing 90% of India’s retailing sector (Krishna 2020a). Organised retail players like Amazon, Reliance, Walmart, Future and others are actively weaving in kiranas into their play for retail dominance with upgrades in technology, shop floor design, sales support among other strategies (Krishna 2020a; Mishra and Chanchani 2020; Jaswal 2020; Singh 2020).

Kiranas have been the backbone of the Indian retail sector for decades, serving as points of commerce and distribution. These stores are usually characterised by small shop space of usually less than 500 sq ft (Goswami and Mishra 2009) and are usually run by the owner with little hired help and a limited number of items (Ramakrishnan 2010). The items carried by the kirana stores are localised and are representative of the consumption habits of the local residents and their socio-economic status (Sathish et al 2010). They also served as landmarks and identification for localities, especially in areas where locating addresses is difficult (Sachitanand 2020). These characteristics of the kirana store make it an indispensable ally to the organised retailers who see them as partners in advancing their reach. Numerous attempts have been made by retailers like Future Group, Reliance Retail, Amazon, and Flipkart towards modernising these stores—digitisation drives, payment services, and automated stock replenishments being few of the offerings (Sachitanand 2020; Krishna 2020a; Mishra and Chanchani 2020; Jaswal 2020; Krishna 2020b; Nandi 2020; Poojary and Krishna 2020). These organised retail players in both brick and mortar and e-commerce have been drawing alliances vying for more market share, and penetration while improving their operational efficiency.