How Can Indian Corner Shops Propel Themselves Into The Digital Future?

In Germany, they have become a distant childhood memory: Small corner shops, known as "Tante Emma" where everybody knows each other and does their quick shopping for everyday items. In India, these neighbourhood corner shops still play an important role. But online shopping is now starting to make an impact.

Women in brightly coloured saris, men wearing colourful turbans, meticulously decorated elephants, holy cows, hot spices and majestic palaces: welcome to India, a country characterised by diversity and opposites. India is not only a cultural nation rich in tradition, it is also a rising economic power and a rapidly growing high-tech hub. The implications of this clash are also noticed in the retail sector.

Everything for the daily needs

Where yoga and Ayurveda are at home, there is a long tradition in retail. The Kirana Stores, little corner shops, are like sand on the sea in India. One of the roughly 12 million neighbourhood corner shops can be found at virtually any street corner. At just 30 to 40 square metres, they correspond to the size of a typical German kiosk, but account for around 95 percent of revenues in the Indian food retail market.

Many Kirana shops are family-owned businesses that are passed down from one generation to the next.

Kiranas play an important role in the daily life of Indians. Here they get everything for their daily needs.The Kirana shops’ customers come from the immediate neighbourhood, which means that the owner-operators know their customers from heart. Basically everyone knows each other. But the technological progress does not stop short of these traditional shops. Online shopping and the many competing shops opening up in the cities are a challenge for the owners of these shops.

Fit for the digital future

With a population of 1.3 billion people, the Indian market holds great potential for online commerce. By 2017, 100 million Indian consumers were already buying their goods online. At the same time, cheap mobile phones and mobile phone contracts further drive the exponential growth of online shopping in India. Shopping platforms are fighting for every single customer by offering massive discounts.

If the independent shop owners want to retain their customers and successfully fend off their competitors, they will have to become fit for the digital future. "Most owners of Kirana shops still work in the same way as their ancestors", explains Arvind Mediratta, Managing Director of METRO Cash & Carry India. To help his customers achieve success in their businesses, a pilot project in Bangalore and Hyderabad has equipped 100 Kirana shops with touchscreen terminals in the last months. An online dashboard gives Kirana owners an overview of their sales, they know when it's time to reorder goods, see which products are making the highest profits and can place special offers on a flat screen to attract attention. Above that the digital terminal allows the shop owners, who are still working in the traditional ways, to automatically send special prices to their customers by SMS message thereby enhancing the loyalty of their long-standing customers. The equipment of even more Kirana shops with digital terminals is planned.

Facts & Figures

  • There are around 12 million Kirana shops in India, which are run by independent entrepreneurs.
  • Kirana shops account for approximately 95% of food retail sales in India.
  • METRO India is currently serving more than 1.8 million family-owned businesses in 14 cities across India.
  • To sustainably reinforce the relationship with its customers, METRO is planning to equip additional Kirana shops with digital terminals.