A recent dipstick survey by JP Morgan highlights the challenges faced by offline grocery retailers in suburban Mumbai due to the rise of quick commerce (qcom). The study, conducted across 50 stores in areas with significant dark store presence, reveals a stark decline in sales for many traditional kirana shops.
Declining Sales Volume
The survey reveals that 60% of offline grocery stores reported a dip in sales, with 82% attributing this to the growing influence of qcom. Among them, 77% experienced sales drops exceeding 30%, indicating significant disruption in the retail ecosystem.
Conflicting Views on the Cause
While qcom players like Swiggy and Zomato argue that their customer base consists of online shoppers transitioning to qcom, kirana stores and trade organizations present a different perspective. Praveen Khandelwal, president of CAIT, accuses qcom ventures of leveraging foreign direct investment (FDI) to distort competition and marginalize local retailers.
Calls for Government Intervention
A significant 62% of kirana store owners demand government intervention to create a level playing field. Complaints about brands and distributors offering higher discounts to qcom players exacerbate concerns about competitive imbalances. JP Morgan suggests that regulatory measures, such as mandating franchise partnerships with multiple qcom players, could address these challenges.
Adaptation by Kirana Stores
Despite the challenges, some kirana stores are adapting to survive in the competitive landscape. Strategies include diversifying stock-keeping units and pack sizes, offering home delivery services, providing bulk discounts, and strengthening customer loyalty through personalized service. These adaptations demonstrate resilience and innovation among traditional retailers.
The Road Ahead
The qcom wave presents both challenges and opportunities. While kirana stores face immediate disruptions, their ability to innovate and foster relationships with their customers could enable them to thrive alongside qcom giants in the long term. Government regulations may also play a crucial role in shaping the future of this coexistence.
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