Clearly, say experts, the power of the small neighbourhood retailer can barely be ignored as organised players look to leverage their last-mile connectivity and reach, luring them by promising support in technology, inventory and tax management. Experts say the idea is to push a plethora of products from food and FMCG on one end to electronic and telecom on the other as kiranas emerge as an important distribution and delivery point for organised players.
Arvind Singhal, chairman, Technopak, says, “The small retailer is today open to technology and better inventory management after demonetisation and introduction of the goods and services tax. They are aware of the power of the internet and of their own strengths. This has opened them up to organised players who are willing to partner them for their growth plans. This model of collaboration benefits both sides.”
Mukesh Ambani, chairman, Reliance Industries, had hinted at the same when he had unveiled the hybrid “online-to-offline” retail model last year, saying it would bring inclusive growth to all as it sought to tap kiranas as last-mile delivery agents.
Biyani alludes to the traditional shopping habits of most consumers and how neighbourhood stores have led food and grocery sales in the country. “Typically, small stores bring convenience to consumers and our interest in increasing that network stems from there,” he says. Future plans to take its small-store network from 1,200 now to 10,000 in the coming years.
Reliance Retail has already added over 2.5 million kiranas to its network in the past few months and is looking at another 50,000 stores as launch of the new commerce venture nears. It is expected to be rolled out in the second half of the current calendar year, sources said. Amazon and Walmart, on the other hand, are running pilots in Telangana and Karnataka, respectively, and likely to scale up the initiatives soon.