Quick commerce platforms are rapidly transforming India’s retail landscape, with $1.28 billion in sales expected to shift from traditional kirana stores to quick commerce in 2024 alone, according to a recent survey by Datum Intelligence.
This shift reflects a notable change in consumer behavior, with nearly 46 percent of quick commerce buyers reducing their purchases from kiranas, signaling a clear preference for faster, more convenient digital alternatives. The migration also represents 21 percent of all sales on quick commerce platforms, highlighting the impact on kirana stores, which are losing ground to the new-age platforms.
A survey of 300 kirana shop owners across 10 cities reveals that the rapid growth of quick commerce—projected to reach $40 billion by 2030—is accelerating the transition away from traditional retail.
Popular names like Zomato's Blinkit, Swiggy Instamart, Zepto, BigBasket and Jiomart, known for delivering products within minutes, are rapidly becoming primary online retail channels, with 67 percent of kirana stores reporting a drop in sales since the emergence of quick commerce.
The appeal is particularly evident among consumers: 82 percent of quick commerce buyers have shifted at least 25 percent of their usual kirana purchases online, and nearly 5 percent of surveyed consumers have stopped buying from kiranas altogether.
"Value for money" and convenience
Cost-effectiveness and speed make quick commerce an attractive alternative to kirana stores.
Nearly 66 percent of consumers perceive greater value in quick commerce platforms due to exclusive deals, discounts, and wider product selections that are difficult for kirana stores to match.
“We've noticed a 20-25 percent decrease in foot traffic since the rise of quick commerce platforms,” said a kirana owner. Another remarked, “Customers are comparing prices with quick commerce apps and demanding discounts we simply can’t afford.”
The competitive advantage of quick commerce platforms lies in their technological infrastructure and efficient logistics, which allow them to offer services that small kirana stores struggle to match. Kirana stores, often operating on slim profit margins, lack the resources to invest in similar technology.
The All India Consumer Products Distributors Federation (AICPDF) reported that around 2 lakh kirana stores have closed in the past year alone, with metros accounting for 45 percent of these closures, followed by Tier 1 cities at 30 percent, and Tier 2 and 3 cities at 25 percent.
One kirana owner described the uphill battle of competing with deep discounts and free delivery, noting, “Offering home delivery ourselves hasn’t been enough. Customers want discounts and immediate service, both of which are tough to provide.”
Many kirana owners, particularly in cities like Hyderabad and Ahmedabad, report significant declines in foot traffic, with 46 percent of quick commerce users saying they’ve reduced spending at local kiranas.
Decline in unorganised retail
Despite holding a dominant 92 percent share of India’s grocery market as of CY2024, unorganised retail, primarily kirana stores, is expected to lose more ground as quick commerce accelerates the channel shift in grocery shopping.
The estimated quick commerce market size for 2024 is $6.01 billion, and industry analysts at Elara Capital have forecast that the platform's growth could eventually wipe out up to 30 percent of kirana stores.
The declining trend extends across multiple product categories traditionally dominated by kiranas, including groceries, fruits, vegetables, and even seasonal festival purchases. Quick commerce, with its ability to provide rapid delivery and competitive prices, is increasingly appealing to customers who prioritise convenience over the traditional kirana shopping experience, the survey notes.
Future uncertainty for Kirana owners
Nearly 74 percent of kirana owners see quick commerce as a long-term threat, casting doubt over the future of these small businesses.
“We’ve started listing products on online platforms to keep up, but matching the convenience and prices offered by quick commerce is extremely challenging,” shared one kirana owner. With 76 percent of quick commerce users planning to increase their grocery purchases on these platforms, kiranas may face an even greater reduction in sales in the coming years.
As the consumer shifts towards digital and quick commerce deepens, kirana stores are grappling with an evolving market that requires new strategies for survival, leaving these small retailers at a critical juncture in the face of an increasingly digital retail landscape.
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