New Delhi: German wholesaler retailer Metro Cash and Carry Pvt. Ltd plans to digitize over five lakh kirana stores in India in the next three to five years as a part of its ongoing digitization and omnichannel strategy, a top company executive has said. The wholesaler retailer is aggressively focusing on the business to business (B2B) segment by offering modern fixtures, point of sale terminals and marketing tools to kiranas with the aim of increasing customer traction alongside boosting modernization of its traders and retailers businesses.
“We are looking for growth through both through physical store expansion as well as e-commerce omnichannel players. The focus is on the omnichannel strategy and digitization of kirana stores. The stores need to look much better and inviting, and we want to transform them into self-service stores," Arvind Mediratta, managing director and chief executive officer, Metro Cash and Carry, told Mint in an interview. “It is an ongoing journey, and we cannot do this in a year because there are 12 million kirana stores, including those in rural areas."
Metro has partnered with EasyPay that provides the point of sales devices for kirana stores to track daily purchases, sales, inventory and customer details like modern retailers. It claims to have already set up 500 of such terminals and plans to reach all of its 30 lakh registered businesses.
Mediratta did not disclose the budget for the digitization process and the expected returns for the Indian arm of German Metro AG from the exercise. “This will help kirana stores with around 35-40% of revenue if topline (sales) remain the same, however kiranas will have to spend anywhere between ₹ 50,000 and ₹ 2,00,000 for such installations," Mediratta added.
Last year, Metro Cash and Carry collaborated with technology provider Snapbizz and worked with 100 retailers in Bengaluru, Hyderabad and Delhi to digitize their businesses by giving them free hardware and software worth ₹ 32,000 each, Mint reported in April.
Metro is also providing working capital loans and will play on pricing to double its share of wallet.
“The big play is happening over kiranas and we are partnering with suppliers to sell them at 10-15% lower than MRP and pass the benefit it on the consumers to compete with the D Marts of the world," said Mediratta, who believes that is the way to survive in the competitive industry.
Last year, Metro launched OPD (order processing, payment, collection and delivery), its version of an omnichannel strategy to reach as many small business owners.
“We want to give them horsepower to compete through softer things like modern stores, digitization, top-on inventory, getting them loans. But if you don’t give them competitive pricing nobody will come and buy from you," Mediratta added.
The Dusseldolf, Germany-based company competes with Walmart Inc., which in India is also planning to scale up its kirana store programme called Mera Kirana that helps small family-owned grocery stores modernize, Mint reported in June. Both peers are sending out sales team and ramping up hiring to reach to kiranas and work directly with them.
Mint also reported in February that Metro plans to aggressively promote its own brand label to hotels, restaurants and cafés (HoReCa) industry with the target of doubling its revenues. Mediratta told Mint it will look to target 15% of revenue over the next three years from own brand label from the current 4.5% and will also push the products through these kirana stores in due course of time.
Metro is also expected to open its 27th store in Ghaziabad before the end of September and has revised its target of opening 50 stores by 2020 to focus on quality and the omnichannel strategy.