Retail in India

How Kirana (Mom and Pop retail) stores are using a hybrid online/offline model to provide value added customer service in India

Even before the controversy surrounding the relaxation of FDI norms in Retail exploded in India and obituaries for Kirana (Mom and Pop) shop owners were being written and bandied about, a “quiet revolution” had been taking place in the backyards of the India Retail Industry. The reason I call it “quiet” is because it has been slow, silent and systematic, without the usual fanfare and brouhaha that accompanies any “disruptive” business ideas that begin to take shape and form nowadays. The reason I call it a “revolution” is because it is surely changing the way Indian consumers are beginning to shop from their neighbourhood Kirana (Mom and Pop) stores, but even more importantly the fact that Kirana shop owners are again, re-inventing themselves to provide Indian consumers with the best of service and convenience. The company which is facilitating the fight-back of the Kirana (Mom and Pop) stores and arming them against both modern retail and future MNC retailers is called “Aaramshop”.

With 1075 Aaramshops in 21 cities and an ever increasing number of Kirana stores joining the “Aaram” fold, this has the makings of a great disruptive social change that is bound to sweep the Indian Retail landscape. The reason why Aaramshop will bring about a revolution is because it is based on a very noble social cause: to provide the Kirana stores with a strong, modern, customer facing technology arm to supplement their personalized service and take on the might of the Modern Retail outlets with their unending queues, non-functional barcodes, irrelevant and one size fits all promotions, non-personalized shopping experience, car parking problems-the list goes on. While malls and Hypermarkets promise a relaxing and enjoyable shopping experience, a lot of Indians are slowly realizing the merits of spending that time doing something more worthwhile than the “Retail Therapy” of shopping for groceries!

Another important aspect to note is that AaramShop is a free to use service for both the consumers and partner retailers; therefore there is no escalation of cost of essentials when you use AaramShop.

While we are always witnessing Silicon Valley come up with its slew of immensely successful start-ups, we are yet to witness the same in India. This is where companies like Aaramshop can make a difference and take the lead and inspire other disruptive innovations which are “glocal (global+local)” in nature.

There are some interesting trends which come to the fore on the state of online shopping in India if we look at the Aaramshop consumers-the males seem to be more inclined to shop for groceries online than women who constitute only 37% of the buyers. Another interesting demographic that is taking shape is the fact that while female shoppers form a lower percentage of the overall buyers when it comes to online grocery, they are by far the larger spenders- both in terms of the basket size as well as the basket value. While men seem to be buying a lot of snacks online, women seem to be stocking up soaps and detergents apart from other household items.

It is noteworthy that women between 36 to 45 years of age come up as the largest buyer segment, while for males it is 22 to 45 years. This negates the widely held hypothesis that online shopping is a “youth only” activity. Online grocery shopping is serious business and is being increasingly taken up by working professionals and even mature households.

Most of the shopping happens after 12:00 hours and the top categories that were purchased during this period were: 1. Staples – Rice, Wheat, Lentils and Dal (pulses) 2.Edible Oils 3. Coffee, Tea, Cocoa 4. Laundry supplies 5. Milk and Dairy products. It is also interesting to note that most late evening orders are for next day-delivery. (Produced with permission from SOGC report of Aaramshop)

Where Aaramshop will score over other online grocery retailers is the simplicity of their model where you don’t have to wait for your grocery orders to arrive in 48 hours from a central warehouse etc.; they are sourced from a neighbourhood shop that you may have already shopped from/know very well. There is long term sustainability of the model and it is not based on heavy discounting to attract customers and there is no disruption of the distribution or financial models, but an efficient integration of the existing Retail eco-system and adding more aaram (comfort) to the lives of shoppers.

Imagine a scenario, a year down the line, given the velocity of Aaramshop adoption by Kirana Store owners, let’s assume that 60% of Kirana Stores in urban India, in Tier 1, Tier 2 and Tier 3 cities join the conglomerate called “Aaramshop” which is a very loosely bound decentralized structure with common interests and a uniform desire to provide the best personalized service that grocery retailing can offer – there is no monetary might in the world that can beat this eco-system, leave alone big box modern retailers. To further ease the shopping experience and reduce shopping time, personalized quick order lists based on the buying behaviour of customers can be activated by the consumer, online through the click of a button. I can see the FMCG companies lining up to provide customized discounts to the shoppers to maintain and build brand loyalty. The brands would see a quantifiable return on their promotion spends through data captured by Aaramhop and slowly move away from big ticket advertising spends where you can’t measure or capture your returns on those absurd spending. The list goes on…..

Online grocery shopping retail in India is at a nascent stage, but it has tremendous potential to catch up like wildfire. Though the first prime minister of India had famously said “Aaram Haram hai” meaning, “comfort is sinful”, this is one comfort which the time-starved, urban Indian shopper will dive sinfully into.

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