FRAI Urges Government to Provide Technology Platform for Kirana Stores to Stay Competitive

Federation of Retailer Association of India (FRAI), a representative body of about 80 lakh micro, small and medium retailers from across the country with a membership of 42 Retail Associations organised an event in New Delhi today to highlight the urgent need for enhanced technology support from the government for Kirana stores. Such support would enable the Kirana stores to remain competitive amidst the increasing encroachment into their space by quick commerce companies like Swiggy Instamart, Blinkit or Zepto.

The retailers called upon the government to provide local Kirana stores with a technology platform that would allow them to compete on equal terms with quick commerce players, effectively creating a level playing field. The retailers acknowledged the shift in consumer preferences towards faster delivery and competitive pricing and expressed their willingness to adopt new technologies, become more efficient and provide better services to the customer. They also stressed that without government support to level the playing field, it would be difficult for small retailers to compete with the deep resources of larger e-commerce players.

The retailers suggested that the technology platform could take the form of an Uber-like platform where customer orders are allocated to the first Kirana store that accepts them. On the platform, ratings can also be provided to the Kirana stores which will encourage them to provide the best possible services to customers.

While outlining the technology platform for small shopkeepers, the retailers stressed that the present lot of quick commerce players or any big online player should be kept out of such a platform. Given their extensive resources, these big players could dominate such a platform, undermining the very purpose of supporting Kirana stores and leaving them once again at a disadvantage.

In the event, FRAI highlighted the growing threat of organised players and emphasized that the rise of e-commerce and quick commerce platforms is putting the very existence of traditional Kirana stores at risk. These retailers have already suffered humungous financial setbacks in the last couple of years and are barely managing to sustain livelihood in the given the high inflationary condition. FRAI also highlighted that livelihood of millions of retailers are at stake and their shops are on verge of closure.

Present at the event and supporting the cause of the Kirana Stores, Praveen Khandelwal, Member of Parliament, Lok Sabha said, “Our honourable Prime Minister Narender Modi has always the best interests and admiration for the small traders in his heart. The government, under his leadership, is fully attuned to the challenges faced by small retailers and is committed to addressing their needs. I also fully understand the difficulties that Kirana stores are facing due to the rise of quick commerce players. These platforms are pushing near-expired goods, stale fruits and vegetables, and engaging in deep discounting and predatory pricing, all while operating through dark stores. We will take up these issues in the Parliament and beyond, to ensure that such practices are addressed and that Kirana stores are protected. Today is Bharatiya Grahak Divas and I believe that both the shopkeeper and the consumers are two sides of the same coin. For shopkeepers, it is crucial to stay updated and embrace all channels to meet the evolving expectations of customers. I am committed to ensuring that traders and Kirana store owners receive the best digital tools to connect with their customers, enabling them to modernize, update, and computerize their businesses for the future.”

At the event, the small retailers who had congregated from across the country voiced their concerns that the rise of e-commerce, particularly quick commerce, is fundamentally altering consumer behaviour, posing existential challenges to Kirana stores. This is creating a need for urgent intervention and regulation to protect small retailers. While e-commerce has been gradually reshaping India’s retail sector for years, it is quick commerce—ultra-fast delivery services that promise deliveries within 10–30 minutes—that is significantly driving a dramatic shift and pushing the traditional Kirana stores to the brink.

Abhay Raj Mishra, Member & National Coordinator, Indian Sellers Collective and Honorary Spokesperson, FRAI said, “The technology support that the retailers are requesting can easily be created or facilitated by the government. Over the years, the present government has been a pioneer in providing citizens with essential services through technology by introducing world-first innovations like Aadhaar and UPI. With new technologies brought in by the government, like ONDC (Open Network for Digital Commerce), what is now required is a more focused approach in creating a specific solution for Kirana Stores that makes them as discoverable and accessible to customers, much like the way quick commerce companies are operating. Essentially, the Kirana stores should remain competitive by being empowered to tap into the growing digital market and meet new customer needs.”

Speaking at the event, Gulab Khoda, Joint Secretary, Federation of Retailers Association of India, said, “One of the quick commerce industry manifestations that is eating into the business of Kirana Stores is the mushrooming of the dark stores. Dark stores are essentially the warehouses that stock all the items that a Swiggy Instamart or a Blinkit quickly delivers to their customers. These dark stores are located in densely populated areas to enable fast delivery within minutes. The kind of products stored by these dark stores are similar to those that are found in the Kirana store. But the quick delivery or discounts offered by the q commerce players cannot be matched by the local grocery store. Indeed, the dark stores are creating a situation where the future of Kirana stores is looking very dark!”

The retailers voiced their opinion about the unfair advantage that quick commerce platforms have over Kirana stores. The Kirana stores cannot match the pricing offered by quick commerce giants who benefit from deep pockets, large warehouses and a huge customer base, all of which allow them to offer continuous heavy discounts to their customers. The deep discounting strategies of large e-commerce are often the result of their ability to absorb losses through high-volume sales and deep capital reserves, which the smaller businesses obviously cannot maintain or match. Many among these players have foreign funding and this will ultimately result in destabilising the kirana ecosystem and in a huge loss of self-employment in the country. In the bargain only low paying jobs will get created-a recipe that will make a few people rich and a large number poorer.

The retailers highlighted that the unhealthy competition faced by Kirana stores is only going to intensify as larger e-commerce with even deeper pockets enter the market. They warned that it won’t be long before these big online companies lured by the gains made by the quick commerce players decide to enter the market with their own aggressive campaigns. With their vast resources and scale, these giants could potentially push smaller retailers out of business, further threatening the survival of Kirana stores across the country.

Another point put forward at the event is that the increased competition from quick commerce players has resulted in stagnant sales for Kirana stores, particularly during high-demand periods such as the festive season.

So facing a bleak future, the retailers urged the government to step in and protect them from the incursions of the quick commerce platforms and the looming threat posed by big online players.

Another issue raised at the event was about the death of the traditional unique Indian entrepreneurship culture, as quick commerce corporate structures with their predatory approach will overpower the local Kirana store owner or the shopkeeper who have long thrived within their communities. The Indian traditional entrepreneurship is deeply rooted in local communities and often involves providing goods and services that are tailored to the needs and preferences of a specific market. This creates a strong sense of community and relationship-building between business owners and their customers. This is the unique tradition that will be lost forever if quick commerce and big online players are allowed to continue unabated in capturing the market.