We already know from the ICRIER survey that local retailers popularly known as Kiranas haven’t had an impact as projected or estimated by most. We would like to enhance one some the key business lessons practiced by these Kiranas that can be incorporated by organized retail chains who are back to the drawing board chalking out new strategies on how to win the Indian market. This is with refrence to your neighborhood Kiranas which can be small operated by just a owner and few boys or little large enough offering you the convenience to pick and shop, yet doesn’t scale to be a supermarket.
Kiranas seem to have an edge on choosing the most strategic location for business in residential area or community, even before it is occupied. This case is evident not only in India, but wherever Indian communities live across the Globe
-Americas, Middle East, etc. Kiranas are well known for stocking products in demand in that locality, compared to their competitors who have to push what is in their central database. Customer service in Kiranas is exceptional [you can even get the owner to address your issues], sometimes goods delivered to your home at no cost. The store boys exactly know the location of each and every product SKU.
The second generation of Kiranas who are bent upon giving the feel of supermarket yet unable to scale, have got technology savvy to implement POS with Bar Code Scanner only to embrace the advantages of technology that they can no longer use paper-pencil to keep track of their store merchandise and accounting.
Lastly, cases like that of Food Bazaar vs Kellogg, where the former is refusing to stock Kellogg brand below some margin and is trying to push its own private label Tasty Treat Cereals, a practice not seen with Kiranas as long as the product sells in the neighborhood, he happily stocks them. This business approach will not work in its favor as their are lots of consumers who would want global established brands over newbie private labels.
These could be some reasons why the Kiranas didn’t have to close down, compared to their posh cousins who never made it to black on balance sheet and ultimately wound up.
Note: Kiranas is a Hindi word for Local Mom and Pop store.