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Selling in the 21st century, in a year where we are witnessing a black swan event in the form of COVID-19 is not easy. Having said that, the outbreak of the pandemic has also created opportunities like never seen before for retailers in India and across the world.
In the United States for instance, big-box retailers managed to slow down the momentum of e-commerce and transformed their businesses by riding high on the power of their hyperlocal distribution hubs. Target shares shot up 60% since their late-March low. Lowe's is up 140%, Home Depot 75% and Best Buy 105%, just few of the many examples of offline retail success in America during COVID-19.1
In India, the picture was completely different as the unsung heroes of retail turned out to be the mom-and-pop stores, also known as kirana stores. And we were there to thank them!
These neighbourhood daily essentials stores relying on a robust supply chain during the lockdown and by delivering items to the doorsteps of consumers seized the opportunities that came along during this pandemic.
Well, that's half the battle won!
To ward off competition from supermarkets and e-commerce, the 12 million kirana stores that exist in India as per a Nielsen research will have to completely reinvent themselves.
The next big digital push in India needs to be in digitizing kirana stores. After all, Small and Medium Businesses (SMBs) are the backbone of the Indian economy. In fact, the digitisation of SMBs could add $158 to $216 billion to India's GDP by 2024 and contribute to the country's economic recovery post-Covid-19, according to the Cisco India SMB Digital Maturity Study 2020.2
The focus area therefore should now be on bringing these small and medium scale retail merchants to the fintech ecosystem. There exists a tremendous opportunity now for kirana stores pan India to leverage the power of digital payments considering the widespread acceptance of the same by retail consumers to deliver seamless shopping experiences to their customers.
The change is happening as can be seen from this video of a kirana store owner in Delhi.
At Pine Labs, we have a pulse on this critical segment of the economy like no one else. We are witnessing the change happen first-hand as more small-scale merchants are today aware of fintech opportunities in the digital India. It started soon after the lockdown and was pretty evident in a merchant-focused survey we did in May 2020 where "digital payments acceptance" at the point of sale emerged as one of the top priorities for nearly 50% of the survey respondents dealing in Groceries. Even changing consumer behavior where contactless payments are preferred over contact-based cash transfers during COVID-19 has been a big driver of this change. The interest among kirana store merchants in upgrading their point of sale infrastructure to accept digital payments continues to rise in India.
At Pine Labs, we are thrilled to be ushering in this change in the new digital India and delivering innovative fintech offerings to these kirana store owners in times of Corona and beyond.
By Tanya Naik | on January 14, 2021
By Vinisha Kataria | on January 08, 2021