Srini­vas Chari

Srini­vas Chari, Co-Founder and CMO, Xer­ago, shares his views on the ever con­tin­u­ing con­flict be­tween the tra­di­tional Ki­rana store and the mod­ern su­per­mar­ket and in the process shares some in­ter­est­ing find­ings and in­sights.

Point of Purchase - - CONTENTS -

The ar­rival of big re­tail­ers has no doubt had an ef­fect on the Ki­rana Stores – a place where most of the buy­ing used to hap­pen un­til the early 2000s. In place of 5 Ki­rana stores that used to co-ex­ist in a typ­i­cal res­i­den­tial area now there are one or two. Most large re­tail chains started ex­pand­ing their net­works and sev­eral smaller chains en­tered the mar­kets around 2005. The im­pact on Ki­ranas has been a plum­met­ing in the growth rate from dou­ble dig­its to sin­gle digit. It has been found that peo­ple usu­ally buy unique sit­u­a­tion prod­ucts and low shelf-life prod­ucts from the lo­cal Ki­rana, while planned gro­cery and high-value prod­ucts are typ­i­cally pur­chased in su­per­mar­kets that of­fer bet­ter bar­gains and qual­ity as­sur­ance. In In­dia, re­tail has been get­ting more and more com­pet­i­tive. Depart­ment and com­pany-owned stores have been en­ter­ing into al­most ev­ery sec­tor of re­tail, turn­ing the typ­i­cal man­u­fac­turer to whole­saler and whole­saler to re­tailer. In such cases, where the mar­ket is so ap­peal­ing to big re­tail play­ers as well as to man­u­fac­tur­ers, the Ki­rana stores have good rea­son to worry about their po­si­tion in the mar­ket. In or­der to dis­cuss the ba­sis of sur­vival for su­per­mar­kets and Ki­rana stores, we con­ducted a study across four ma­jor met­ros to un­der­stand peo­ple’s take on the Ki­rana vs su­per­mar­ket de­bate that is never end­ing. The sur­vey fo­cused not only on hard num­bers but other im­por­tant pa­ram­e­ters that have be­come an in­te­gral part of a shop­ping ex­er­cise which is the ex­pe­ri­ence fac­tor and the how - cus­tomer cen­tric, peo­ple per­ceive both the for­mats. 45% of the peo­ple sur­veyed be­lieve that Ki­rana stores carry al­most all the prod­ucts that large for­mat re­tail­ers carry and meet their needs. An­other 34% of the peo­ple be­lieve that Ki­rana stores al­most match the prod­uct port­fo­lio car­ried by su­per­mar­kets and hence it can be safely said that a con­sol­i­dated ma­jor­ity be­lieve that the old Ki­rana is as good as the mod­ern su­per­mar­kets in meet­ing all their reg­u­lar buys. Re­ports pub­lished had in­di­cated a 20% growth rate in the or­ga­nized re­tail space. This could be at­trib­uted to three key fac­tors :

The pub­lic per­cep­tion (Also at­tested by 59% of the re­spon­dents) that su­per­mar­kets give a value for money which they re­al­ize by means of good of­fers and dis­counts that they of­fer ow­ing to the scale of op­er­a­tions which ki­rana stores can­not af­ford.

The pub­lic per­cep­tion (At­tested by 62% of re­spon­dents) that the qual­ity of ser­vice and at­ten­tion to cus­tomer re­quire­ments is sat­is­fac­tory at su­per­mar­kets.

Shop­ping has, in re­cent times moved from just be­ing an ex­er­cise for buy­ing needs to an ex­pe­ri­ence on its own. The per­cep­tion (At­tested by 64% of re­spon­dents) that su­per­mar­kets of­fer a bet­ter a shop­ping ex­pe­ri­ence where they get to look at var­ied brands com­pare them and make pur­chase de­ci­sions is also a key fac­tor in en­cour­ag­ing this churn. But all is not lost for the Ki­rana stores. Peo­ple are of the per­cep­tion that su­per­mar­kets, on sev­eral oc­ca­sions make them over­spend. This can be at­trib­uted to im­pulse buy­ing that hap­pens at su­per­mar­kets to a much higher ex­tent than a Ki­rana stores due to the dis­play of prod­ucts in strate­gic points and of­fers and dis­counts of­fered. Both the for­mats are per­ceived to be sim­i­lar with re­gards to the con­ve­nience fac­tor – each hav­ing its own set of ben­e­fits. While su­per­mar­kets gives us bet­ter of­fers, choices and ex­pe­ri­ence, the lo­cal Ki­rana stores pro­vide us the lux­ury of hav­ing a home de­liv­ery at will, credit ow­ing to long stand­ing re­la­tion­ships that may run into decades, a bet­ter un­der­stand­ing of lo­cal needs and re­quire­ments and faster shop­ping. None of us can think of run­ning to the su­per­mar­ket for buy­ing a sin­gle prod­uct that may eat away enor­mous time nor can think of bar­gain­ing over ev­ery small thing at the Ki­rana store. We do not like wait­ing in the queue for our billing nor keep a con­stant watch at a mea­sure­ment scale and at the lo­cal lad, to avoid get­ting cheated, mak­ing mea­sure­ments at our Ki­rana store. At the end of the day we can con­clude that both ki­ranas and su­per­mar­kets are here to stay. With the unique de­mands of the In­dian mar­ket grow­ing by the day and its 1.2 bil­lion cus­tomers, both of them can co-ex­ist peace­fully by cap­i­tal­iz­ing on their own unique strengths

Srini­vas Chari Co-Founder and CMO Xer­ago

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