Majority neighbourhood stores have created some system where customers can order via the internet or through an app, in a bid to safeguard themselves from losing their customers to e-commerce platforms.
Even as the pandemic disrupted businesses across the country, for neighbourhood grocery stores it was a defining year, several kiranas took to some form of a digital platform to make payments, fulfill orders, manage inventory etc, according to a report by SnapBizz.
SnapBizz devices technology for local kirana stores. In its study, SnapBizz analysed over 2 million consumer bills recorded in its network of kirana stores in ten cities including Delhi NCR, Mumbai, Pune, Ahmedabad, Bangalore, Chennai, Kolkata, and Hyderabad. It works with over 10,000 kirana stores.
Majority of kirana stores have created some system where customers can order via the internet or through an app, in an attempt to safeguard themselves from losing their customers to e-commerce platforms, the report said.
“Over a million Kiranas have gone digital in recent months and their stores have gone online by accepting online payments, ordering supplies online, managing inventory, etc. The technology cover now enables them to leverage their strengths like proximity, personal touch, and flexibility further to acquire new customers effortlessly," said Prem Kumar, founder and CEO, SnapBizz.
As the lockdown struck in March last year—several stores selling essentials found themselves cut off from supplies for days together.
Moreover, consumers too preferred contactless shopping. As a result, home deliveries increased in 2020; 75% of stores are working towards going online, the report said.
Over 80% kirana stores saw an increase in customers. Banking sector has become very involved in the kirana ecosystem.
“The kirana stores continue to leverage online ordering apps to cater to the current consumers," the report said.
Such stores and their consumers also took to digital payments—more through payment apps, leading to lowered instances of payments through credit or debit cards which require more KYC formalities.
In terms of categories—the staples categories witnessed a 20% surge in basket-size and overall spends last year, the report said.
Sales at such stores were more consumption-led rather than price-led except for dals and pulses.
While heightened spending on essential and household items marked the first half of last year, this gradually tapered. Spends on fast-moving consumer goods are back to pre-covid levels, said data from SnapBizz. Demand for biscuits dropped sharply in November.
“It was observed that during the lockdown and till October’20, the shopper spends increased significantly, however, declined and went to pre-covid-19 levels post that. Overall, the consumer spends increased and this was primarily from the larger outlets than the smaller ones. The consumer spends on categories like snacks, biscuits and noodles also increased by 25% in 2020 and the same trend was noted except for biscuits where the spends dropped in November’20," it said.
SnapBizz reported a 50% jump in the share of spends towards the food category in March’20, which it is said is now nearing pre-covid levels.
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