Big online retailers take a hit: Covid-19 brings local shops to the forefront of e-tail sector
NEWDELHI: The Covid-19 crisis has spurred a new wave of online and phone commerce, powered by kirana stores, or local mom-andpop shops, small merchants, cycle-riding delivery men, distributors on scooters, farmers.
The Covid-19 pandemic has shuttered mom-and-pop shops in the US. In India, these retail stores, rich on legacy business skills, are emerging intact, albeit a little bruised. The dependability, deep trust and unique relationships of these neighbourhood enterprises with millions of middle-class consumers have made them resilient and a darling for big tech. These shops account for 80% of the country’s retail sector.
As a punishing lockdown broke the back of big online retail in Indian cities, the country’s 8 million kirana stores have kept supplies going.
Small stores have been able to home deliver goods profitability, or at least without incurring losses. One analyst, who did a survey for a large firm said on condition of anonymity that this is a surprising discovery. “They have well established rules --no delivery beyond a radius 3 km. Some deliver using cycles.”
On April 22, social media giant Facebook announced a $5.7-billion investment in Jio Platforms Ltd, owned by Reliance Industries Ltd, aimed at leveraging WhatsApp’s 400 million subscribers to connect small stores and consumers. According to a report by JP Morgan this week, with this, WhatsApp could soon offer a shopping option to users.
“Our focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in informal sector,” Reliance Jio said in a statement.
When in January of this year, the world’s richest man, Amazon’s Jeff Bezos, visited India, he too promised $1 billion in new investments to bring small businesses online.
“So, how will this work?” asked Delhi’s Mohit Aggarwal, the proprietor of Santoshi Stores, when a surveyor called him this week, seeking to on-board his store on to a bigger online retailing platform. The surveyor was hired by a retail company that Aggarwal did not want to name.
Aggarwal says he received an online tutorial that revealed an ambitious plan to bring millions of shops online. A dummy site explained how. The retailer’s site essentially acted like an online aggregator of hyperlocal momand-pops. After a shop is on-boarded, its inventories are monitored real time. While the front end connects the small shops to consumers, the back-end connects them to distributors.
Consumers can click for orders and also send their shopping list via WhatsApp.
Amazon India already features a “Local Shops on Amazon” to take local shops live. Flipkart said it is working with 37,000 kirana shops and ramping up further to “serve the new set of consumers who are more tech-savvy and want personalized services”.