What Went Wrong for Kirana Stores

For decades, India’s kirana stores were the backbone of the country’s retail ecosystem. These humble neighbourhood shops thrived on personal relationships, flexible credit, and unmatched proximity. They survived the arrival of supermarkets in the 1990s and the e-commerce boom in the 2000s.

However, the latest disruption—the emergence of quick commerce platforms such as Blinkit, Zepto, and Instamart, which promise delivery within 10 minutes—has completely upended them.

Starting in 2023, kiranas began to witness a significant decline in their delivery orders. These deliveries, which had experienced a boom during the COVID-19 lockdowns, began to dwindle as consumers opted for the speed, discounts, and tech-savvy experience of Q-commerce apps.

Delivery-based revenue, which had become a vital source of income, plummeted. The traditional weapons of kiranas — relationships, credit, convenience — suddenly felt inadequate. The impact was widespread, from metropolitan cities to smaller towns like Manipal and Mangaluru.

Learning to Adapt: The Digital Pivot

Kirana store owners, who once viewed digitisation as an unnecessary complication, are now actively exploring digital solutions. A significant shift in attitude is evident. From reluctance to desperation, kiranas are chasing the very tech that once seemed alien.

SaaS platforms and retail tech tools have entered the spotlight—solutions like Near. Store, KiranaPro, and others are helping kiranas digitise inventories, manage online orders, integrate payment systems, and even access hyperlocal delivery networks. Some of these platforms also enable participation in ONDC, opening up broader market access.

Today, these tools are not just “nice to have” — they are essential for survival. They help kiranas transform into agile micro-fulfilment centres capable of competing with dark stores.

Realities on the Ground

The transition, however, is far from seamless. Most kirana owners still face constraints related to working capital, a lack of digital literacy, and operational scalability. Earlier digitisation waves (2020–2023) failed not due to a lack of effort but because solutions were often built for urban, digitally fluent users.

Many kirana owners found mobile-based apps to be complex, training insufficient, and the results underwhelming. The apps did not align with the on-the-ground business realities. Inventory tools didn’t solve supplier inconsistencies. E-commerce storefronts didn’t generate enough visibility. More than 90% of kirana stores that initially tried these tools stopped using them.

Now, the pressure of survival is changing that. SaaS providers are seeing a surge in inbound interest. They’re adapting by offering localised onboarding, vernacular interfaces, and even field-level support.

Building the New Kirana Model

The new kirana model is agile, tech-enabled, and customer-focused. Stores are no longer relying solely on footfall. They’re shifting towards hybrid models, balancing walk-ins with app-based orders and fast deliveries.

Key changes in the new model include:

• Digitising Product Catalogues: Allowing customers to view updated inventories online
• Real-Time Inventory Management: Reducing stockouts and order failures
• Seamless Online Ordering: Simplified UX with WhatsApp integrations or platform tie-ups
• Integration with ONDC: Leveraging India’s public digital infrastructure for hyperlocal delivery
• Payments and Credit Management: Using UPI and digital ledger tools to track transactions
• Marketing and Visibility: Promoting through QR codes, local influencers, and social platforms

Platforms like Near. Store, KiranaPro, and others in the ecosystem are equipping kiranas with the right tools. More importantly, they offer continuous training and performance tracking to reduce churn.

Why Kiranas Still Matter

Kirana stores are more than retail outlets — they’re embedded in India’s social and economic fabric. They act as informal credit lenders, emergency lifelines, and logistical support systems. Losing them would be more than a retail shift; it would alter community dynamics and employment patterns.

Their importance to FMCG distribution is also unparalleled. For decades, brands have relied on kiranas for general trade sales. However, as Q-commerce players demand leaner and faster supply chains, even FMCG brands are beginning to bypass traditional distributors, leaving kiranas vulnerable.

What Needs to Happen

To ensure kiranas not only survive but thrive, a multi-stakeholder approach is needed:

1. Simplified Tech Tools

• Mobile-first, vernacular-friendly interfaces
• Real-world usability over fancy features
• Offline support for onboarding and troubleshooting

2. Working Capital Access

• Tailored credit solutions via fintech partnerships
• NBFCs and banks with sector-specific lending models

3. Brand and Government Collaboration

• FMCG players must build omnichannel distribution paths
• Policymakers should incentivise digital adoption via training grants and tax credits

4. Local Innovation and Differentiation

• Focus on local specialities and community-driven services
• Tie-ups with housing societies, RWAs, and local businesses

Global Parallels

What kiranas face today isn’t unique to India. Walmart’s pricing power and logistics scale similarly wiped out small-town general stores and family-run retailers in the U.S. in the early 2000s. In the process, communities lost not just stores but trust anchors.

While India’s Q-commerce may provide unparalleled convenience, neglecting kiranas could lead to a similar fate. A balance must be struck between scale and sustainability.

The Road Ahead

The kirana revolution is not just about tech. It’s about creating a level playing field in the digital economy. The stores that make the transition early are already showcasing new models of hyperlocal commerce.

Their future hinges on three pillars:

1. Widespread digital adoption
2. Ecosystem-driven support
3. Community-rooted innovation

With the proper support, the local kirana could become India’s answer to blending tradition with technology — and not only survive the Q-commerce wave but define what comes next.