Local Kirane Wale ko Jinda Rakhna Jaruri Hai, Khud ko Jinda Rakhne ke Liye: Win-Win Strategy for All

By CA Rajesh Garg, Assistant Director, Ministry of Finance (Views are personal)

As we are at onset of second phase of Lock Down after successful completion of 21 days , one Horrible “IF“ came to my mind that raised goosebumps. Though I am not discounting the efforts of Online Grocery Stores, whatever be the reasons, it is a fact that they failed to provide assured supply of Grocery items to the urban class during this Lock Down. In such situation, “if these “Local Kirana store“ were not there, I am sure Lock Down would have become a nightmare for me and for almost all of my friends living in Metro Cities.

Our situation would not have been better than a migrant worker even after having money in pocket. It could result in failure of very purpose of social distancing during lock down if everyone would be required to visit Departmental Stores or wholesale markets for purchase of Groceries.

When we were sitting in our homes safely, it is the “Local Kirana Store owner” who came to our rescue by taking health risks in gathering all necessary grocery items from different wholesalers located in every corner of the city.

So, I feel from my heart that we can not become so selfish that once the situation normalizes, we forget all his efforts he has done during this time of struggle.

Therefore, we all must take small steps required to keep his business afloat in times to come. And yes this is not a favor to him, but to ourselves as this will provide ample business opportunities to all stakeholders besides a contingency plan to handle such type of emergency situation smoothly.

Expectations from Different Stakeholders

First From Kirana Store Himself

In India, it is a famous idiom that “आस पराई जो तके जीवित ही मर जाए”, which means who is dependent on others for his success is already a dead man. So he also needs to put his business in order.

It is the trust deficit about quality of products along with convenience moved away most of urban middle class from him. Here, As a customer, I am listing down small cost-effective steps which will reduce the trust deficit of urban middle class:

  1. He should build an image in the locality that he keeps quality products and products of all major brands be it for pulses, Flour, Massale, Oil etc. along with promotion of hygiene in Store.

  2. He should develop one Key Marketing Product of his store which differentiate him from others resultant into increase of footfall for instance he may develop Availability of Fresh and Best Quality Paneer as his Key Marketing Product in locality.

  3. Though he may already providing home delivery along with digital payments, he has to promote it and formalize the whole process of home delivery.

  4. Formalize the process of Consumer-Feed Back System. It will enhance trust of consumers.

  5. His focus should be on Volume and long term relationship with consumers rather than Value and short term relationship by keeping margins at reasonable level.

  6. He should also adopt the model of supply on demand for unusual products to satisfy requirement of every customer without blocking money in inventory.

Association of Local Kirana Stores with support from Ministry of MSME and Ministry of Skill Development, should launch some kind of formal training course (may be in online mode) for implementation of Standard Operating Procedures for these measures in Kirana Stores.

From Start-Ups

Start-ups are “Blessings” for the society who are engaged in giving much comfort to the society at large by removing many obstacles with the use of technology.

Now when there is over saturation of start-ups in Business-Consumer segment, there is ample opportunities for Tech professionals to charter this area of Local Kirana Stores and provide them technology solutions especially in the area of:

  1. Inventory Management

  2. Order Processing (Receipt of Order, Payment Solutions, Placement of order, Dispatch and Delivery)

  3. Consumer Engagement (marketing, consumer feed back, account management , analytics etc.)

From Online Grocery Store: Who are Endangering Existence of Stores

If you evaluate the FDI policy of Government for e-commerce industry, one of the important objectives is that these online portals will become partner of these local Kirana stores by providing technology, payment solutions, wider reach and order processing experience in cost-effective manner.

They were expected to work just as aggregators of these Kirana Stores like in the case of Cab aggregators. Instead they themselves are behaving like businessmen with the help of large stockiest, brands and other related companies. They have become competitor of these small businessmen with the inherent objective of endangering their existence from the market.

I would also like to highlight here that Draft E-Commerce Policy is already in pipeline which is expected to tighten the rope around these loop-holes.

Therefore, these Online Stores are expected to follow the FDI policy of Government of India in letter and spirit and become partner of these Local Kirana Stores. It will reduce inventory management and order processing costs of these Online Stores utilizing infrastructure of these Local Stores including for Packaging and Delivery .

From Brands

Today, for short term gain Brands are offering lucrative deals to these Online Portals placing Local Kirana Store at disadvantageous position in terms of pricing. But in long term it will be like “अपने पाँव पर कुल्हाड़ी मारना” means thereby that it will put their own business in danger due to following two reasons:

  1. As you see the business model of these online portals, they have already started launching their own brands in multiple product categories. Once these portals will have control over buying behaviour of consumers, they will promote only their own brands.

  2. In future, once these portals have monopoly kind of situation, negotiation power of these Brands over prices will fade away.

Therefore, it is expected from these Brands that they should not offer much price edge to these Online Portals. Here as a passing remarks, I also want to caution consumers also as these two points will also hit the interest of consumers badly in terms of availability of choices and pricing of products.

From Banks

Today, banks are offering lucrative cash back schemes to its customers for purchase of grocery items from these online stores. It may be part of their marketing strategy to acquire the consumers.

Since most of Local Kirana Stores are now accepting digital payments, the same cash back schemes should be made available to Local Kirana Stores by the Banks. It will be beneficial for Banks besides Local Kirana Stores, as it will reduce the customer acquisition cost for Banks as compared to Online Stores. (E-wallets have acquired most of customers by giving cash back on offline purchases).

Further, Banks are expected to launch some loan products customized for these Local Kirana Stores under subsidies schemes of Government like MUDRA, MSME etc. I am sure that default rates for these loans will be far less than other loans as they have more social boundations and self respect in the society.

Finance Professionals

I want to raise genuine concern with my professional colleagues who have ignored this segment. I request especially my young colleagues who are tech savy to charter in following area which will provide ample business opportunities to them:

  1. With the collaboration of tech professionals, try to develop some technology driven solution for Kirana Stores especially for cost management, pricing etc.

  2. Low Cost Compliance Solutions with Laws of Land for instance some cloud based services.

  3. Financing Solutions for ramping up their Business Operations.

From Consumers

I know, you may be little bit uncomfortable with the sequence of stake holders and thinking that consumers should be first stakeholder as he is “King for Business”.

But you know, if all stakeholders listed above do their bits, I do not have pinch of confusion in mind that Why consumers will not restart buying from these Kirana Stores.

One thing is expected from consumers that though they may re-start online shopping of grocery due to Pricing and Quality consideration, even then they should identify some products like branded packed items which can be purchased through Offline Stores without compromising quality.

By fulfilling above expectations, we will be doing great service to economy and society of our own country as it is an accepted fact that : “Distribution of Wealth” is always good for the economy and society. It will also be great help to ourselves by saving businesses of these Local Kirana Store, as it will help in such tough times besides create hindrance in creation of monopoly of such Online Stores.

Please share feedback in comment section, it will help me in updating the above piece while submitting it with appropriate stakeholder.

#OnlineGroceryPortals #amazonpantry #BigBasket #Grofers #LocalKiranaStores #NeighborhoodStores

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