‘Transformation of Kirana stores essential to India’s economic growth’
New Delhi: The transformation of just 10 per cent of the 13 million traditional grocery retailers in India, known as ‘Kirana’ stores, could boost retail consumption by more than 5 per cent and generate approximately 3.2 million new jobs in India, according to a new report from Accenture and the Trust for Retailers and Retail Associates of India (TRRAIN).
Titled ‘Transforming Kirana Stores to Drive Economic Growth’, the report outlines a strategic approach for unlocking value by transforming Kirana stores through a seven-stage framework that focuses on store location and layout, technology, store funding and product placement, among other factors.
“The rapid changes in consumer behaviour and acceleration of online commerce, mandate that the Indian retail ecosystem transforms to meet emerging consumer needs,” said Piyush N. Singh, India Market Unit lead.
“As the lifeline of the Indian retail sector, a digital-led transformation of Kirana stores can result in significant economic gains, including a nearly 1 per cent employment growth in India. The transformation process needs to be expedited with comprehensive policy intervention, technology support, and, most importantly, collaboration between key ecosystem players.”
The report provides a framework for the modernisation of Kirana stores, focusing on six key areas including location assessment, funding assessment, store layout, technology, product placement practises, and customer engagement.
“India is a nation of shopkeepers, and Kirana stores play a crucial role in the Indian retail sector, which in turn contributes nearly 11 per cent of the nation’s gross domestic product and 8 per cent of its total workforce. Kirana transformation will not only help store owners improve profitability but also add value to the customers and overall ecosystem,” said B.S. Nagesh, founder of TRRAIN.
The report also mentions the importance of building an enabling ecosystem for the transformation of Kirana stores and promoting inclusive development. It had recommended that fast-moving consumer goods should implement innovative retailing techniques such as Kirana-specific merchandising, customised programmes for product trials and assortment.
The report said that e-commerce and cash-and-carry retailers can leverage Kirana stores for last-mile delivery in remote places and in turn support them with digital technology such as digital payment solutions at the point of sale. Intermediary players such as wholesalers and logistics providers, on the other hand, need to modernise to fulfil the needs of the transformed retail ecosystem.
Retail associations and non-governmental organisations (NGOs) should support the education and skill-building of Kirana store owners and collaborate with government bodies to facilitate the modernisation process at scale, the report recommended.
The government can enable transformation with policy changes to stimulate growth in consumption, gross domestic product (GDP), tax contribution and employment, also providing the impetus for other stakeholders to play their part, it said.