FMCG keen for modernization of traditional kirana ecosystem

The COVID-19 pandemic is one of the factors for the bounceback of kirana (grocery stores). As such, FMCG companies are very much keen for the modernization of traditional kirana ecosystem.

Damodar Mall, CEO grocery retail – Reliance Retail, at the CII FMCG Summit on Thursday highlighted that they are banking on e-commerce and kiranas to drive consumption for their grocery division. “Never in the history of FMCG trade in India has seen so much capital, technology and talent directed at modernizing of the kiranas,” he said. “When you modernize the syntax of shopping, sales and consumption go up.”

Mall said that in the first wave of e-commerce, recruitment happened in value fashion and electronics. He pointed out that now, grocery will lead the way. “However, the most balanced omnichannel player has always been kirana. Half of their business was being done with remote order and home delivery, which has now been replaced by apps and Whatsapp messaged,” Mall observed. “It is we who have conveniently learnt to keep the silos of traditional and e-commerce models.”

Sunil Kataria, CEO India SAARC of GCPL, said getting kiranas to service faster is key as it increases turnover rates for everybody. “Geo-tagging and geo-fencing technologies are coming handy as they track the real-time interface of the retailer and productivity,” he said. “Chat bot-based ordering and tele-calling aid remote ordering.”

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Moreover, the Unlocking the Indian EB2B Retail Opportunity report also noted the role of kiranas. It stated that the Indian retail economy is on a strong growth path to reach $1.3 trillion in the next five years, with 13 million kiranas forming the backbone of retail India. Kiranas have specially proved their resilience in this COVID times on merits such as accessibility, home delivery, localized experience, selling on credit, and support from the government. Furthermore, the local stores have various businesses as well as financial needs such as inventory management to reduce cost of operations, transparency in pricing and newer revenue streams, effective support on credit, credit management, GST support, and digital payments.