Will E-Commerce shake hands with small retailers and Kirana stores?

Indian government urges e-Commerce players to make small retailers
and Kirana stores part of their growth.

India is among the fastest-growing e-commerce economies in the world. The industry is growing at an annual rate of 51% and is expected to jump to US$ 120 billion in 2020. Unmatched Foreign Direct Investment and uniform implementation of Goods and Services Tax have contributed majorly to this growth story of e-commerce in India.

Furthermore, smartphone usage and internet penetration in India’s semi-urban and rural areas have largely influenced the buying behaviors of consumers, boosting e-Commerce sales remarkably all over the country. Online shopping offers customers numerous choices at competitive prices across a wide array of products, and the convenience to shop anything, at any time and from anywhere with just a few clicks on their computers, tablets, or mobile phones.

India’s E-Commerce growth threat to traditional retail stores?

While it has spoiled the Indian customer for choice, the tremendous growth of e-Commerce is a major threat to traditional mom and pop stores. Many retail enterprises are stepping up by opening online stores and adopting tech solutions to offer e-payment options, quicker deliveries, and better customer experiences. However, small-scale brick-and-mortar stores with limited capitals and infrastructure accessibilities are struggling to keep up.

The participation of niche industries like FMCG in online trading is choking a large number of small Kirana shops and retail outlets to death, owing to tremendous online discounting and significant loss of business.

Government urges E-Commerce enterprises to team up with small retailers

The Department for Promotion of Industry and Internal Trade (DPIIT) has approached e-commerce companies asking them to send plans to work with small retailers, indicating that a policy may be implemented in this interest. With this initiative, the government is trying to address the concerns of India’s unorganized retail industry.

Cooperation from e-tail businesses will help the government in creating a standard framework empowering small retailers to catch up to the rapidly growing e-commerce sector. Such collaborations will also strengthen India’s e-commerce landscape in the years to come. Fulfillment companies in 3PL sector, tech logistics, inventory management, customer support, etc. will also play a major role in putting the two pieces together.

Locus is working towards this vision in association with one of India’s leading fashion e-commerce players. The company was seeking greater last-mile efficiencies, especially in locations where several packages are delivered on a daily basis.

Locus devised a business model that involves local retail stores that offer home delivery services in dropping off the company’s packages to neighboring areas. Partnering with such local Kirana stores in heavy density areas helps save a significant amount of time and effort otherwise taken by delivery agents in finding correct addresses.

In conclusion:

Will e-commerce team up with small retailers and Kirana stores making room for mutual growth? Let us wait and watch! However, e-commerce giants like Flipkart, Amazon, Zomato, and Swiggy haven’t yet responded to DPIIT’s query.

We at Locus are looking to work with E-Commerce companies to drive synergies across the retail ecosystem in India by bringing e-commerce companies and retail stores together, and would be happy to participate in this discussion.