It's no secret that the rise of quick-commerce platforms and instant delivery services has contributed to the downfall of Kirana stores across the country. According to the All India Consumer Products Distributors Federation (AICPDF), India’s largest retail distributors association, the swift growth of quick commerce in India has resulted in the closure of approximately 200,000 Kirana stores over the last year.
In a statement, the federation also noted that sales in Kirana stores have stayed flat this festive season. Presently, India is estimated to have around 13 million Kirana stores, with over 10 million located in tier-2 cities and smaller towns.
According to Dhairyashil Patil, National President of AICPDF, quick commerce is eating away kirana stores’ earnings and profitability.
“Deep discounting, combined with predatory pricing, has created an unfair playing field, eroding the customer base and profitability of Kirana stores that have anchored our retail landscape for generations,” he said.
“These aggressive practices, coupled with the economic slowdown, are forcing many traditional retailers to shut their doors.”
Recently, numerous consumer goods companies have noted a surge in demand for their products on quick commerce platforms, driven by changing consumer preferences. Financial Express reported on Monday that several direct-to-consumer brands are experiencing up to a 250% increase in festive sales on these platforms compared to last year.
The industry association pointed out that customer visits to Kirana stores have dropped by nearly 50% this year when compared to the past two to three years. It also noted that quick commerce is impacting margins as local stores struggle to compete with the discounts provided by online and quick commerce platforms.
“These aggressive practices, which prioritise short-term customer gains over sustainable business practices, are directly responsible for the closure of nearly 200,000 Kirana stores across the country,” said PM Ganeshraam, chief patron at AICPDF.
Data from the federation revealed that quick commerce has had the greatest impact in metropolitan areas, leading to the closure of 90,000 stores in these cities alone, where quick commerce platforms are primarily active.
Additionally, about 60,000 stores have shut down in tier-1 cities, with another 50,000 closures in tier-2 and tier-3 regions. The AICPDF has also urged for regulatory measures on quick commerce in India to establish protections for small retailers.