As quick commerce becomes more popular, customers are increasingly turning to online platforms for essential purchases.
A couple in Bengaluru stopped at a local vendor to buy fruit and vegetables, but left when they found the prices were higher than on apps for quick commerce. The shopkeeper claimed that the price difference was minimal -- just Rs 5-6 -- but eventually caved in to the couple's demands.
In a kirana shop nearby, a similar situation unfolded. A customer hesitated in buying dishwashing fluid, citing online discounts. These incidents are not isolated. Quick commerce platforms in urban India are eating away at the kiranas' customer base.
The shift in power is unquestionable, even if it isn't yet complete. A Datum Intelligence study found that 82% of consumers had moved at least 25% of their kirana sales to quick commerce platforms and 5% of them have stopped shopping in kiranas. This trend will continue to grow and reshape the retail landscape, but kiranas will suffer.
Ravi B S is the owner of a local supply store in Bengaluru. He says that the sales are impacted by the younger generation. The older generation prefers to go out and shop. The working class has decreased a little, but loyal customers that have been coming to our store for years still come and say they do not believe in purchasing through apps or paying extra money on delivery.
The trend is changing fast.
India's grocery sector is still dominated by unorganised retailers, with kiranas holding a 92% share. Kiranas remain the backbone of this sector despite the rapid growth of organised retailing and ecommerce. According to a recent report, quick commerce's growing popularity is driving customers away from kiranas and towards online platforms.
In the midst of this transition, Confederation of All India Traders has raised concerns about the practices of quick commerce platform. CAIT's White Paper released recently highlighted the alleged abuse of Foreign Direct Investment by these platforms in order to disrupt India’s retail ecosystem. Praveen Khandelwal (CAIT Secretary General, Chandni Chowk, MP) accused quick commerce of utilizing FDI in order to control suppliers, fund predatory pricing, and dominate inventory. These strategies create an unfair playing field that makes it difficult for India's 30,000,000 kirana shops to compete. Khandelwal said that small retailers were being aggressively driven out of the market.
The White Paper revealed quick commerce platforms, backed with over Rs 54,000 billion in FDI have prioritized subsidising losses in operations, controlling supply chains and offering steep discounts via select preferred sellers, over investing in long term infrastructure. These practices helped quick commerce platforms capture 25-30% market share of the grocery industry, which was previously dominated kiranas.
Alok Agarwal of Kiko Live emphasized the impact of small retailers. Over two lakh kiranas were forced to close down by the expansion of quick commerce in dark stores. It has already taken over 40% of the kirana's business in metros. "If kiranas do not digitise their business and offer similar quick commerce service, these platforms will soon capture 70-80% in urban areas."
Experts believe that quick commerce's success is limited to India's top 20 cities. However, the impact of this on kiranas is alarming. Some kiranas have reacted by adopting home-delivery models in order to retain their customers. However, given their limited resources and scale, competing against well-funded quick commerce companies remains a major challenge.
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