Lockdown: E-commerce firms see big opportunity in kirana tech

  • E-commerce players are also taking their learnings to resolve issues plaguing the kirana ecosystem
  • Brands will continue to innovate on how the corner stores can be a key part to their supply-chain operations

Tarush Bhalla
Updated13 May 2020
Across the country, logistics and technology firms are working with kirana stores to help resolve supply-chain issues.
Across the country, logistics and technology firms are working with kirana stores to help resolve supply-chain issues.

BENGALURU: The resilience of the humble kirana shop has attracted many online delivery and e-commerce companies as they join the rush to deliver essential goods to households, sourced from these neighbourhood stores, amid the lockdown.

This partnership, while opportunistic to an extent, has re-affirmed the desire of large online delivery firms to equip kiranas with technology solutions and help them innovate.

“We realised that technology and better logistics is something most offline shopkeepers can be better equipped with. They need a robust cataloguing, inventory and order management system that is intelligent enough to figure out which SKU they need when and in what quantity. This is important to maximize profits, prioritize orders, and help in keeping pilferage and wastage low,” said Srinivas Mothey, senior vice president, Paytm Mall.

“A good back-end inventory management system logged seamlessly to an e-commerce platform will help offline stores get more orders and increase revenue,” added Mothey.

Paytm Mall is looking to equip kiranas with a technology ecosystem which involves payments as well as logistics.

But as e-commerce players continue to fight the current crisis, with delivery of essentials, these technology-driven companies are also taking their learnings to resolve issues plaguing the kirana ecosystem.

Swiggy, which has on-boarded several neighbourhood stores on its platform, has been working towards adding newer features and looking to train partner-store owners better. It is also looking to equip such shops with more sophisticated features once the lockdown is relaxed further.

“We might add more features in the coming months and equip store partners with a more sophisticated app. Mirroring the offline purchasing behaviour, we might suggest users on alternative SKU, in case a product is running out. There might be technology integrations to let store owners know which products are running low or which are popular,” adds Sunder.

Swiggy has said it is working on a multi-kirana model for supercritical items like medicines and essentials such as diapers, where a delivery partner can check with multiple stores on the availability of items and ensure delivery.

Recently, the company announced a ten-member engineering team in Chennai, to leverage Artificial Intelligence and build scalable systems that will enhance aspects of the business.

Over the past month amid the lockdown, companies such as Grofers, Swiggy, Snapdeal and Paytm Mall have made a dash for the kirana strategy, partnering with several such shops, which they claim was always a part of their product roadmap.

After signing a $5.7 billion deal with Facebook in April, Reliance Industries’ e-commerce platform JioMart went live in areas of Navi Mumbai, Thane and Kalyan, allowing users to place order from kirana stores in the vicinity.

JioMart entails Reliance Retail’s offline-to-online initiative, which would link producers, traders, small merchants, brands and consumers through technology. The company currently runs neighbourhood stores, supermarkets, hypermarkets, wholesale, speciality, and online stores. Reliance Retail aims to connect as many as 30 million neighbourhood stores through the venture.

In all this, kiranas continue to be the focal point to power these technology initiatives.

“We believe that e-commerce can help kirana stores optimise their operations and improve their profitability by providing them with the benefit of its lean supply chain and technology. Currently, our owned brand products are available in 350 kirana stores and we aim to scale this up 2,000 in the next six months,” said a Grofers spokesperson.

“Kirana stores have deep and valuable consumer relationships and also have the advantage of physical proximity to their users. Using technology, access to large assortments, and leveraging the ground level connection and reach of Kirana stores to create more value for both buyers and sellers is something that we will continue to explore,” added Snapdeal.

Not surprisingly, digital payments firm PhonePe has introduced features to let its customers discover stores in their vicinity that are operational and are delivering at home with the option of making remote, contactless payments.

As the lockdown curbs are relaxed further, brands envisage that their ‘kirana-tech’ strategy is here to stay as they continue to innovate on how the corner stores can be a key part to their supply-chain operations.

Harsha Razdan, partner and head, consumer markets and internet business, KPMG in India said e-commerce companies have been wanting to tie up with local kiranas for quite some time now.

“...The covid scenario has just expedited the partnership as the benefits to e-commerce companies are very evident in the short-term. Most Indian consumers are still accustomed to buying from local kiranas and this can make the e-commerce – local kiranas partnership a “win-win” for both,” Razdan said.

(Kalpana Pathak contributed to the story.)

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