Wednesday, July 14, 2010

‘THE END’ of Kirana Stores…

- It seems to be a very brawny and immature statement. But this isn’t a rough prediction but is based on a very strong gut feel. Traditional Mom-n-Pop stores have always been dominant in the Indian Retail Sector. Time and again Kirana Stores have proved themselves to be more price-efficient, have a better service delivery and the most important factor being the shop next door..! These factors were unmatchable by the growing Organized Retailers. Hence organized retailers chartered the path of Malls, exclusive stores and premium outlets where Branded and High-Grade items were sold and hence their market remained very niche and their presence being limited to cities.

Later the biggies such as Birla Group (More) and Reliance Group (Reliance Fresh) ventured into the Food & Grocery retailing following on the footsteps of extremely successful Subiksha. But, recession washed it all. Subiksha went bankrupt on its inorganic and un-sustained growth whereas Reliance, Birla and others were finding it extremely difficult to uphold themselves. Suddenly the reality behind the lucrative organized retailing business was realized. Analysts spoke that nothing cannot compete the efficiencies of kirana stores and it is impossible to overtake them as a major Retail touch point. The bubble in organized retail stood as a boon; now the retail organizations were much were prudent in their approach. They now understood that their biggest competitor was not the Kirana store, but the consumers’ mindset..!

India as a country has always been influenced with some thing or the other. After Independence Indian public were much attracted to Western culture and traditions. This saw an immediate effect in Indian lifestyle and behavior. Slowly women transformed from wearing Sarees to Western Formals, men from dhoti’s to pants. Even in the remotest part of the country one may find men wearing pants rather then dhotis’ or lungis’. We were now inclined to Western Rock and Jazz, rather then Rafi and Kishore da. You may think, why I am blabbering about culture and demographics rather than discussing about transformation in Retail. The reason behind this is the social behavior and thought process behind the concept of organized retailing. The Indian psyche will evolve to shop in a much sophisticated and elegant shop instead of an unorganized and thronged Kirana outlet. Even the shopping is factorized based on the children’s’ decision, which obviously would be an up-market store.


The transformation is bound to happen..! And I do not say that the kiranas will cease to exist and it will be the death of our so called ‘desi baniya’. Even the Kirana’s will upgrade to match the facilities provided by organized retail and slowly the kiranas’ will end up being an ORGANIZED STORE. Licensing and Franchising will further ignite this process. The other challenge will be penetrating the densely populated rural markets. And according to me organized retail doesn’t mean exploiting the resources as mentioned in the article below; but organized retail will improve efficiencies in the long term and the entry of giants such as Walmart and Carrefour will only increase competition resulting in better choices for the end consumer. 


kirana stores will rule

6 comments:

kiranruth said...

The only problem with kiranas in city is the target sector is too small ... don you think so ?

ashish said...

the prob is not this .. actually kirana shops r opened by lower class people who doesn have much capital.. so its always small.

Rental Wala said...

Hi i read this blog its very nice blog please keep it up nice blogging every day. keep it up
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jawad haider said...

It was wondering if I could use this write-up on my other website, I will link it back to your website though. Great Thanks.

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