Leading e-commerce players collaborate with Kirana stores, transforming them into hyperlocal fulfilment centres.
Praveen Govindu, Partner, Deloitte India
Rising demand for speed, convenience and curated choices is reshaping how Indians shop for essentials. As a result, once-dominant traditional Kirana stores, often family-run, hyperlocal and deeply embedded in the socio-economic fabric, are losing ground to quick commerce platforms and D2C brands. India's online retail market is projected to reach US $ 125 billion by 2025, posting a CAGR of 21 percent. Within this, quick commerce is expected to hit US $ 5.8 billion by 2025, expanding at a remarkable CAGR of 47 percent and accounting for nearly 5 percent of the total e-commerce Gross Merchandise Value (GMV).1
For decades, Kirana stores have been the lifeline of the Indian retail market, offering personalised service, flexible credit and unmatched proximity. They still account for over 90 percent of grocery sales, particularly in tier 2 and rural areas. However, the rise of tech-driven retail models is challenging their dominance. Falling revenues, store closures and shifting consumer preferences push these traditional retailers to adapt or risk obsolescence.
Quick commerce has emerged as a disruptive force, redefining the delivery promise from 30 minutes to just 10. Led by major platforms, it is compelling the traditional e-commerce players to adapt to this rapid delivery model. The sector is projected to grow by 47 percent in 2025, reaching a GMV of US$5.8 billion.
Initially focused on groceries, these platforms are now diversifying into electronics, fashion, beauty and personal care, driven by urban consumers’ appetite for instant gratification. Aggressive marketing, festive season surges and impulse-driven purchases are fuelling repeat orders, often exceeding five transactions per customer per month. Yet, profitability, regulatory hurdles and sustainability remain persistent challenges.
In 2025, quick commerce started facing regulatory challenges over anti-competitive pricing, food safety violations and consumer protection laws. Rising costs of quick commerce platforms are forcing brands to optimise product listings for better ROI. Due to supply chain challenges and storage limitations, capacity constraints are further pushing costs upward, leading to thinner margins for both brands and platforms.
D2C brands are capitalising on digital channels to build direct consumer relationships. Posting a CAGR of 40 percent since 2022, touching US$ 80 billion in 2024 they are poised to cross the US$100 billion mark by 2025.2 These brands enjoy control over pricing, data and customer experience, bypassing traditional intermediaries. However, rising customer acquisition costs and intense digital competition are prompting many to reassess their dependence on quick commerce platforms, seeking better margin protection and customer ownership.
The competition for consumer wallet share is intensifying. With their tech prowess and deep logistics networks, quick commerce platforms are shifting consumer habits from planned monthly purchases to frequent, impulsive buys.
D2C brands, using these platforms for distribution, are further eroding Kirana stores’ product and assortment advantages with their unique product offering. Yet, this is not a zero-sum game. Kirana stores continue to play a vital role, especially in regions where digital adoption is slower.
As per a Deloitte consumer survey conducted in 2024, 34 percent of urban and tier-1 consumers surveyed prefer e-commerce as a channel for shopping; out of this 35 percent use quick commerce as a preferred mode, while the remaining 65 percent still prefer e-commerce channels.3 For categories such as packaged food and beverage, consumers tend to favour quick commerce as a channel over traditional e-commerce, as these categories are nowadays driven by impulse purchase and immediate needs.
As household size shrinks and dual-income families become more common, the demand for fast, convenient delivery options has noticeably increased, making quick commerce the go-to channel for everyday essentials.
Signs of collaboration are emerging. Leading e-commerce players collaborate with Kirana stores, transforming them into hyperlocal fulfilment centres. These collaborations combine the trust and reach of Kirana stores with the efficiency of digital platforms, reducing operational costs and unlocking new revenue streams for both sides.
Additionally, Kirana stores are independently teaming up with SaaS providers for smart cataloguing, inventory management, integrated payments and affordable last-mile logistics. These innovations are expanding their service radius and enabling them to cater to new customers. Major FMCG conglomerates are digitising their retail partners with eB2B apps and AI-driven platforms, enabling online catalogues, real-time ordering, credit and targeted promotions to bridge the gap between offline and online retail.
While quick commerce and D2C brands pose significant challenges, Kirana stores are far from being displaced. They remain indispensable, especially in tier 2 and beyond, where digital penetration faces hurdles. Further, by integrating Kirana stores into the quick commerce infrastructure, the retail ecosystem gains inclusivity and resilience.
India’s retail future lies not in collisions but in collaboration and coexistence. Each player, including Kirana, Quick Commerce and D2C, brings unique strengths to the table. Together, they are shaping a more dynamic, consumer-centric market that reflects the evolving needs of Indian customers.
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