What keeps the kirana store alive?: An essay by Ambi Parameswaran

Today’s kirana store is bigger, cleaner, better-laid-out, more selective about what to offer. It is at par with modern-trade outlets in terms of tech. What it retains: proximity, trust.

A friend who was national sales director at a large FMCG / consumer goods multi-national company narrated this story to me almost 15 years ago. Their global CEO was making one of his visits to the provinces. As was the norm, he was taken to a local market, where he walked into a few modern-trade outlets (minimarts, hypermarts, etc) and a smattering of kirana stores.

The next day, in the boardroom, the global CEO posed a question to his India team: “What is the current contribution of modern trade (MT) to our sales? And what do you think the contribution will be in 10 years?” The team said the share was as yet small, contributing less than 5% of overall sales of the company. The consensus was that this figure would rise to 10% within a decade.

The global CEO emphatically said the number would be closer to 20% in that time. The team was curious to know how he arrived at this. His answer was that he would have doubled any number the team suggested. He based this on his extensive travels.

“I have seen the way modern trade has grown around the world. In country after country, I have seen the local management underestimate the growth of MT. As a result, my simple guess is that it will be twice what the local team thinks it will be. So if you had said 15%, I would have said 30%,” he declared proudly.

I have not exchanged notes with my friend at the 10-year mark, but my suspicion is that the global CEO, in the case of the Indian market, would have been wrong. The modern-trade outlet has not been able to steamroll the humble corner store here, the way it has in many other countries.

Neither has the newer evolution of delivery apps. Online grocery supply platforms, I am told, account for about 5% of total sector sales, and even this is an optimistic view.

So, how have the kiranas managed to prevail? What makes them tick?

It is said that India is a land of shopkeepers. We don’t have the biggest retail brands in the world, but we have a multitude of tiny stores.

The local kirana store has a deep relationship with its community, one that it maintains by tailoring its requirements to local tastes. Bonds are maintained with individual customers such that the store owner knows which new products each might like to try — a suggestions metric that works considerably better than the advertiser-driven online algorithms, for instance.

It helps that the average kirana store’s cost of operations is low, with many owners living above or behind the shop. Added to this advantage is the low cost of labour, since most of the family typically works at the store too.

And there is the unique “khatha” system (khatha being Hindi for account), of offering items on credit and collecting the money at a later date; an interest-free understanding predicated on the idea that the buyer will pay as soon as they can.

In his book It Happened in India (2007), India’s modern trade veteran Kishore Biyani talks about how he wanted each of his Big Bazaar store managers to essentially be the local kirana (the word, incidentally, comes from the Sanskrit “kritanna”, for “cooked food”). He wanted them to understand the tastes of the locals and adapt the merchandise accordingly. If there is a temple in the neighbourhood, and a festival at that temple, he said, he wanted them to be ready to offer special deals around it, he wrote.

This is hard to do across a chain, which is why the pandemic-era lockdowns were both a bane and a boon to the kirana.

On the one hand, these small standalone stores had to tackle, overnight, a spurt in demand, since consumers were worried about entering air-conditioned modern-trade stores. On the other hand, there was the challenge of getting the right stocks.

Covid-19 separated the not-so-agile kiranas from the agile ones. The latter managed to spruce up their stores and convert them into small modern-format self-service spaces. They quickly adopted digital payment systems. Many now place stocking orders on apps and track shipments there as well.

So, if one were to compare a successful kirana today with a successful one 10 years ago, one would see, in the now, a bigger, cleaner, better-laid-out space, more selective of what to offer, and technologically at par with modern-trade outlets.

Challenges remain. The biggest is the reluctance of the next generation to take up kirana shopkeeping. Can technology make the livelihood more alluring? This is as-yet unclear, but will likely become apparent, particularly in the prime metros, over the coming decade.

As I speak with store owners in my neighbourhood of Dadar, which could be termed middle-class Mumbai, I can see some moving out of general groceries and becoming specialist stores, selling just dry fruit, or just ready snacks.

No more gunny sacks of food grains for them. They want to move up the value chain.

Another significant change is set to be staffing patterns. Already, there is a growing influx of women visible, as shopkeepers and as attendants.

Remember the moustachioed utensil-store owner Vinod Sharmaji: “Aap apne biwi se kitna pyaar karte hain?… Jo biwi se kare pyaar, woh Prestige se kaise kare inkaar? (How much do you love your wife… A man who loves his wife truly, how could he ever deny her a Prestige (pressure cooker?)”. Well, the shopkeeper is no longer quintessentially male.

A lot else has changed since that 1982 Prestige ad. The general consensus is that, in the larger Indian cities, modern trade stores and e-commerce platforms are set to grow rapidly, and eat into the kirana’s share of the pie. But the numbers do not, so far, bear this out. And this death knell has been rung before.

Liberalisation, globalisation, supermarkets, malls and e-stores were each expected to decimate the kirana. Instead, the corner store borrowed tips from each, stocking ready foods and sourcing salad dressing from overseas; adding specialty cheeses and stacks of Lindt to the shelves.

Meanwhile, they retained what they’d always had: proximity and trust.

Can they thrive amid instant-delivery apps and corporate giants in the online retail space? To my mind, the question isn’t, can they. It is: What will the next reinvention look like?

Our kiranas remind me of the legend of the sage Markandeya. The story goes that his father, the sage Mrikanda, prayed to Shiva for a son, and was told that he could have a virtuous child who would live only 16 years, or a malicious one who would live to old age. Mrikanda, wanting only what was good, chose the former. He and his wife Manasvini were blessed with Markandeya, a child who lived a life devoted to Shiva.

At the time of his appointed death, in fact, he was doing what he always did: praying close to the lingam he worshipped. So close, that when Yama arrived to claim him, his noose encircled them both. An enraged Shiva reared out of the stone and brushed the God of Death away, and Markandeya lived on.

The way smart kirana stores can survive is by doing more of what they have been doing: serving the neighbourhood customer. And betting on the fact that the larger, lumbering behemoths simply cannot sprint and pivot as they can.

(Ambi Parameswaran is the bestselling author of 11 books on branding, advertising and consumer behaviour)

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