Tech News, Magazine & Review WordPress Theme 2017
  • Supply Chain Updates
  • GLOBAL NEWS
  • REGIONAL NEWS
  • Industry Buzz
  • CURRENT ISSUES
No Result
View All Result
  • Supply Chain Updates
  • GLOBAL NEWS
  • REGIONAL NEWS
  • Industry Buzz
  • CURRENT ISSUES
No Result
View All Result
United States Supply Chain Management Council
No Result
View All Result
Home Supply Chain Updates

Why are kirana stores hesitant to partner with Reliance, Amazon and Flipkart?

usscmc by usscmc
November 8, 2019
Why are kirana stores hesitant to partner with Reliance, Amazon and Flipkart?
Share on FacebookShare on Twitter

Scores of reports have been written on how retail biggies want to empower the humble neighbourhood kirana store owners. While some are using them as last mile delivery points, the rest are getting them to buy their inventory from them, thereby nudging them to get rid of traditional distributors. Reliance Industries Chairman Mukesh Ambani himself announced at the recent RIL annual general meeting about his vision to make livelihood better for the 12 million strong kirana store network on the back of technology, which will help kirana store owners to manage their billing, inventory and margins far more efficiently apart from a host of other benefits. While Reliance claims to have already on-boarded 25 lakh kirana stores, Amazon and Flipkart say they have 23,000 and 17,000 kirana partners in their network.

Reality, however, is quite different. The neighbourhood stores are skeptical about partnering with these biggies. Anuj Agarwal runs a small grocery store in Palda in the outskirts of Indore. A second year college drop-out (who runs his father’s shop), the 20-year-old from no angle seems technologically challenged. For, as he attends to his customers, he finds enough time to pose for a selfie, which he promptly posts on Facebook. He also finds time to play a mobile game during the free time he manages while attending to consumers. But the moment he is asked about partnering with the likes of Reliance, Flipkart or Amazon and do business through their apps, it’s a vehement no. “If I start ordering inventory through the day browsing through apps (his phone has a host of apps from HUL’s Shikhar to Udaan) how will I attend to my customers?” he questions.

As Agarwal attends to his customers, a distributor of Anik Ghee walks into his store and Agarwal quickly tells the distributor to give him a few 500 ml packs and goes back to attending his customers. “I can deal with distributors while I attend to my customers, if I start using apps how will I attend to customers. Mine is a one-man store,” he says.

Hemant Bhai, who runs a kirana store in the adjoining residential area of Manish Baugh has similar concerns. He also says that apps don’t understand his needs. “They often don’t have what I need. I always prefer a distributor as he knows what kind of pack sizes sell in my store and gives me only those ones.”

The biggest issue all of them have with organised retail biggies is credit. Traditional wholesalers and distributors give them a week-long credit, which organised retailers don’t. The kirana store economics has always worked on credit. The kirana store owner buys his inventory on credit, sells the inventory and then pays the distributor. “Distributors understand our needs. If I have a problem with a particular SKU, the distributor takes it back without asking too many questions, big retailers don’t take back inventory which we can’t sell,” says Roopchand Bagmar, a kirana store owner in Nashik.

Kirana store owners in Mumbai, however, aren’t as averse to doing business using technology. Vipul Shah, a kirana store owner in the western suburbs of Mumbai, says he uses Big Basket’s B2B app to order small portions of inventory, but he always prefers buying from the traditional distributor. His reasons are similar to those of kiranas in the smaller cities of Indore and Nashik. “The distributor understands my needs better and most importantly gives me credit.” Shah mostly buys premium products such as green tea or even Coke from the online apps.

But both Shah and Agarwal at Indore or Bagmar in Nashik are averse to the idea of installing point of sale machines (PoS) the likes of Reliance are asking them to use. “If we instal their machines we will be forced to buy from them and we can’t afford to put off distributors who have been working with us for decades,” explains Shah.

Retail industry experts don’t buy this argument in totality as they believe that one of the reasons kirana store owners are hesitant to join the digitisation bandwagon is because they don’t want to declare their earnings and pay taxes. Bulk of kirana store owners claim that they earn much below Rs 40 lakh per year in order to avoid taxes.

While technology is something they clearly don’t want to use, are they open to becoming last mile delivery points of Amazon or Flipkart? Space is a constraint. “Where do I store their inventory? I need space for that,” says Agarwal. This explains why likes of Amazon and Flipkart are looking beyond kiranas, at beauty parlours, local gyms and tailor shops as last mile delivery points, as they have more space. Even though kirana stores would be happy to partner with these retail biggies, space is surely a challenge for them.

Will the 12 million strong neighbourhood stores ultimately succumb to the pressure of big retail giants? Although the immediate response is that they would not join, when probed a little, kirana store owners do see themselves as part of a network of a big retailer. “Distributors are already nervous of losing business. I never tell them that I also buy through apps because I know they won’t like it,” says Shah.

The biggies, however, need to do a lot more before they can actually convince kirana store owners to be part of their network.

ALSO READ:Reliance, Amazon, Flipkart battle royale for digital dominance in India

ALSO READ:Grofers aims $1 bn revenue by year-end, to add 700 kirana stores

ALSO READ:Flipkart taps 27,000 kirana shops to boost last-mile delivery

usscmc

usscmc

Recommended.

Spending More Time At Sea

Spending More Time At Sea

February 28, 2020
Retail Sourcing and Procurement Market Share, By Product Analysis, Application, End-Use, Regional Outlook, Competitive Strategies & Forecast up to 2025

Research Report and Overview on Autonomous Last Mile Delivery Market, 2020-2026

December 13, 2020

Trending.

Here’s why dozens of cargo ships are parked for days off Long Beach’s coast • Long Beach Post News

Here’s why dozens of cargo ships are parked for days off Long Beach’s coast • Long Beach Post News

January 16, 2021
Port Delays Leave Cargo Ships Stranded off U.S. Pacific Gateways

Port Delays Leave Cargo Ships Stranded off U.S. Pacific Gateways

January 14, 2021
Teamsters rush to end strike as support grows for Hunts Point warehouse workers in New York City

Teamsters rush to end strike as support grows for Hunts Point warehouse workers in New York City

January 22, 2021
Creek Fire spurs citizens group to support forest management

Creek Fire spurs citizens group to support forest management

January 24, 2021
Top 5 Globally Recognized Supply Chain Certifications

Top 5 Globally Recognized Supply Chain Certifications

January 24, 2021
United States Supply Chain Management Council

Categories

  • Global News
  • Supply Chain Updates

Tags

APICS Globally Recognized Supply Chain Certifications IIPMR Certifications International Institute for Procurement and Market Research (IIPMR) ISM Next Level Purchasing Top 5 Supply Chain Certifications top supply chain certifications

Trending

Job Alert: Openings in career advancement, medical, management, customer service and more | KLRT

Five big trends shaping sustainability in 2021

DSV to develop new Stockholm logistics centre

State procurement in the Arctic up 37 percent in 2020

  • Privacy Policy
  • Terms of Use
  • Antispam
  • Disclaimer
  • Contact Us

© 2021 www.usscmc.com

No Result
View All Result
  • Supply Chain Updates
  • GLOBAL NEWS
  • REGIONAL NEWS
  • Industry Buzz
  • CURRENT ISSUES

© 2021 www.usscmc.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.