Even as q-commerce scales, its share in India’s total grocery retail remains modest when viewed at the national level. Largely because 45% of grocery consumption still comes from rural India.
Q-Com (Source: AI Image)
There has been a lot of hue and cry around quick commerce eating into traditional brick and mortar retail in India, especially in urban or semi-urban pockets. The impact has been there, true. However, India is a vast country where coexistence of different retail formats rather than death of a certain category has largely come out from the thoughts and reasoning of industry experts.
Even as quick commerce scales, its share in India’s total grocery retail remains modest when viewed at the national level. Largely because 45% of grocery consumption still comes from rural India, untouched by the quick commerce model.
But in the top 100 urban centers, the story is different. About 6%–8% of quick commerce demand is incremental, while the rest is being diverted from traditional channels such as general trade (kiranas), modern trade, and e-grocery platforms. That competitive siphoning, while not catastrophic yet, is creating ripples.
However, the impact on kirana stores is nuanced. According to retail industry experts, the so-called “C-type” kirana outlets, which cater to lower-income groups with limited assortments, remain largely unaffected. Instead, the “A-type” premium grocery stores in metros targeting affluent households are facing the heat.
The Covid era has been a major inflection point for India’s retail industry. Since then, it has accommodated a lot of changes. It made people more inclined to online shopping. Especially in perishables and groceries, consumers shifted their spending from non-essential to essential categories. This change in priorities, combined with a growing preference for instant delivery, has fuelled the rapid expansion of the quick commerce segment. However, this growth has impacted the traditional kirana stores in urban and semi-urban India only.
Further, price remains a major factor. While kiranas usually offer a 2%–5% discount on MRP, modern trade averages nearly 18%, and e-commerce close to 17%. Quick commerce platforms, with relatively smaller discounts of 6%–9%, are managing to draw customers away, especially in convenience-led segments including snacks, soft drinks, and packaged foods in urban and semi-urban markets.
A recent Kearney report highlights that modern trade stores and e-commerce platforms consistently offer the steepest discounts. These platforms optimise costs with larger delivery sizes and higher-value baskets, enabling them to offer significant discounts while operating on lower margins. In contrast, quick commerce players see their effective discounts shrink by 200 to 250 basis points once delivery and handling fees are factored in and that makes them cost-effective only when stacked up against kirana stores.
As per a recent Bizom report, close to 23,000 kirana stores have shut down in the metro cities of India. The report further assures that this is not the end of the kirana shops in our neighbourhood. As per the report data, the kirana stores are finding a new footing in the rural and small towns of India. It emphasises that traditional brick and mortar stores are rather evolving, and it certainly is not the end of the format.
Kumar Rajagopalan, CEO, Retailers Association of India, says, “ There are lots of things happening in the market today. There are large marketplaces who are really building up the ecosystem to be able to supply from a pin to an elephant. There are a whole lot of B2C players who now started new brands in the market. Besides, there is also commerce that's happening at a very fast pace. So, the small retailers definitely have to be aware of what is happening to their customers and how much of the share of wallet of the customer is being taken away by competitive capability. Having said that, does the small retailer have to kind of lie down and perish? Not really. The small retailer has to create their own niches.”
He says the small retailers can become super specialty retailers in case they sell items in such a specialised manner that the big retailers may also not be able to come up to that level. They can create experiences that are much beyond what is otherwise available to people.
If customers are buying online, retailers can make much more accurate predictions and be more empathetic toward their customers. This enables them to offer products that better align with each customer's specific needs, even tailoring suggestions based on the timing or context of the purchase.
The quick commerce boom has undeniably redefined convenience. But in the process, are we trading away community, trust and long-term sustainability for the fleeting thrill of a 10-minute delivery?
Certainly not. What remains most effective in retail is human interaction, especially face-to-face communication, or even phone conversations. For example, many small retailers are now leveraging social media platforms and messaging tools such as WhatsApp to enhance the shopping experience.
Increasingly, we see that these days local kirana stores are sending updates and product information via WhatsApp. They might also ask customers to send their requirements through the app so they can fulfill them efficiently. This approach has proven to be extremely useful and convenient.
The Bizom report highlights, unlike their urban counterparts who face various challenges, kirana stores in rural markets are demonstrating strong resilience and growth, with nearly 2,67,000 new stores added. The kirana model continues to resonate with consumers, particularly in markets once viewed as slow-moving. This shift highlights a new frontier of opportunity and expansion-the semi-urban and rural regions, which are now emerging as welcoming and fertile ground for growth.
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