JOIN USWhy online retail majors are wooing kirana shop owners base to boost reach
Business-to-business (B2B) e-commerce major Udaan is promising small retailers delivery of a wide range of products at attractive prices directly from the manufacturers cutting out the middlemen, according to a report by Business Standard.
Co-founder of Udaan, Sujeet Kumar, told the publication that India has around 25 million small retailers and 90 per cent of the retail market is dominated by them.
“The market is huge... The B2B market is around $780 million, of which e-commerce penetration is less than 1 per cent, so there is a huge market waiting to be tapped to supply the small retailer,” he said.
The report added that at the back end, small retailers have between five and 15 procurement agents and that big e-commerce players like Jio Mart, Udaan, Metro Cash & Carry are looking at grabbing a larger share of those transactions by supporting kiranas with services.
"Covid-19 has accelerated the already fast digital-led evolution of the highly fragmented and unorganised Indian trade/retail industry. At the same time, the pandemic also highlighted the unique structure of the Indian economy, with millions of kiranas and neighbourhood stores becoming the lifeline of our country at the time of crisis," Udaan co-founder Amod Malviya had earlier told PTI.
Earlier this week, the Indian e-commerce startup signed a pan-India distribution partnership with Danish sportstyle brand, Hummel. As part of this partnership, Hummel will leverage Udaan’s vast distribution network to offer its range of products across the length and breadth of the country
Metro's platform is used by over one million kirana shops. The company's CEO and MD, Arvind Mendiratta, told the publication that the aim is to provide kirana shop owners services and technology by which they can "increase revenues, profits and reduce inventory so that they can improve his cash flow."
Metro’s Smart Kirana programme has wooed 2,000 retailers promising them the said objectives and "upgrading their stores in 48 hours by offering them tips on product placement and display."
Udaan operates in the same space as Metro, selling products to three million small retailers directly from manufacturers.
Like Metro, Udaan, which operates in the same market space, also promises to save the middlemen commissions. The company says that it can save three to four per cent that they can pass on to the retailer.
The report added that retail experts find the bid to include kirana a 'slow and arduous process'. "For one, small retailers are chary about integrating digitally with larger players on grounds that it will give them access to their customer bases," it said.