} These kirana stores are also known as corner shops, C- store or convenience shop. Click here to see Forbes India's comprehensive coverage on the Covid-19 situation and its impact on life, business and the economy​, [This article has been reproduced with permission from ISBInsight, the research publication of the Indian School of Business, India], For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you, Donald Trump exits White House at a lowest approval rating of his team, How 80/20 helped Simba brew the survival keg in 2020. event : event, Keep an eye on competitors around and the goodwill they have earned from the … However, a strong traditional channel would provide an indirect benefit as well: it would check the power that large organised retailers have over the manufacturer.Q. As more and more customers are placing orders by phone call, WhatsApp, online … Sample size consists of 101 Kirana Store retailers. The Indian retail industry has certain key features that make it unique. Could you tell us more about this? 4 INVENTORY MANAGEMENT. It has tied up with nearly 60,000 kiranas, and has plans to enroll more by April. Manufacturer-led promotions are relatively infrequent. Most FMCG manufacturers do not picture the Indian retail landscape this way and often either disproportionately allocate resources depending on the size of the city or extensively focus on strengthening their supply chain and sales infrastructure in large cities rather than building new supply chain and sales infrastructure in the rural areas. Majority of the store owners find it difficult to match the requirements as keeping such a large inventory is not possible for them. FMCG manufacturers should train their sales-force personnel to be more receptive to the needs of the traditional kirana stores. Very rarely would you see Unilever India or a Proctor & Gamble offering a 15% extra for their regular 180ml shampoo. } Before looking at fancy retail marketing tactics, start by leveraging the assets you already have. on: function (event, callback) { Services like inventory management, product category management, shelf space management and customised point of sale signage that are usually offered to organised retailers can be extended to these traditional retailers to help them adopt best practices and to compete effectively.A common mistake is to allocate the advertising budget and sales-force personnel based on the size of the city. The traditional kirana stores are here to stay and FMCG manufacturers should not neglect the huge potential of this channel. (function() { These small shops stocks up with vide range of groceries and daily need products like sanitary products, snacks, tobacco etc. These unique value-added services create superior value for many consumers. Determine the reasons behind these things, then use those insights to steer your retail marketing strategy. The traditional stores are very flexible and have often built personal relationships with members of the local community that they serve. In your paper, you mention that promotions have both within-category and cross-category effects. The kirana store owners have taken a lot of effort to keep up with the changing demands of the crisis and managing their day-to-day supplies. Increasing urbanisation, increasing incomes, and rising aspirations for a better quality of life are reshaping the Indian retail space.Most FMCG manufacturers do not picture the Indian retail landscape this way and often either disproportionately allocate resources depending on the size of the city or extensively focus on strengthening their supply chain and sales infrastructure in large cities rather than building new supply chain and sales infrastructure in the rural areas.Another common mistake most global FMCG manufacturers make in India is to ignore the traditional kirana stores. This creates a win-win for everybody. It provides clear catalogue of products available and gives clear and concise information to buyers to decide on the products they intend to purchase. Could you explain?A promotion in the pasta category can not only affect pasta sales but also the sales of other categories such as pasta sauce and canned vegetables. The retail industry in emerging economies such as India presents challenges that are typically not seen in these contexts. In the offline market, more people know you, greater will be the chances of acquiring customers. Working Paper, Indian School of Business. Image: Shutterstock ISBInsight: What motivated you to investigate the Indian retail industry? For FMCG manufacturers, the differences across cities in terms of sales in traditional kirana channel and organised retail channel is decreasing. The results show that the difference in monthly sales to a distributor across different city size tiers, i.e., metropolises, mini-metros and other cities and rural areas is decreasing over time, while profitability is increasing across all classes of cities over time. } An Empirical Investigation of Unique Aspects of Retailing in India: The Perspective of Consumer Packaged Goods Manufacturers. 2. About the Interviewer: Second, the government regulation requires fast moving consumer goods (FMCG) manufacturers to print the “Maximum Retail Price” or MRP on the package of the product. Kirana stores and the power of big data. The power of Kirana stores has stood the test of time smoothly for centuries, from monarchical ages to 2020. Is a focus on organised retail justified on the basis of profitability or volume rationales? Increasing urbanisation, increasing incomes, and rising aspirations for a better quality of life are reshaping the Indian retail space. The learning from the developed world cannot be applied directly to the retail industry in the emerging economies.The Indian retail industry has certain key features that make it unique. In this paper, we shall examine what the small kirana shops perceive about the growing corporate organised retailers in relation to their business and employment. Walk through a street and you will find more kirana stores than organised retail outlets like Big Bazar or Reliance Fresh.Second, the government regulation requires fast moving consumer goods (FMCG) manufacturers to print the “Maximum Retail Price” or MRP on the package of the product. A common mistake is to allocate the advertising budget and sales-force personnel based on the size of the city. })(); ISBInsight content is free to read. Objectives 1. A Kirana store is a general department store that stocks and sells all kinds of household items, especially the ones that belong in the kitchen like groceries. There are more than 15 million traditional kirana stores in India. Get your visiting cards designed. The concept of Kirana stores exists only in the subcontinent of India. These convenience stores are also found at petrol pumps or gas station to satisfy the basic needs of consumer while traveling. However, a strong traditional channel would provide an indirect benefit as well: it would check the power that large organised retailers have over the manufacturer. “We are Seeing Shorter Duration Programmes”. Data Protection Bill: Can it ensure your privacy online? Understanding how the intensity of promotions in one category affects that category and other category revenues is important for an effective and profitable promotion campaign.Q. Working Paper, Indian School of Business. Eventually, the entrepreneur realised that the work needs to start from demand aggregation and not supply aggregation beca… Thus, they lose the business in the long run. A large chunk of potential in terms of customer relationship personalisation offered by the traditional kirana channels remains relatively untapped by the FMCG manufacturers. Ace of Club: How Mahindra Holidays & Resorts rode the Covid storm, US startups struggling to hire when times are tough, News by Numbers: How Indian singles look to mingle in 2021, Timeline: Joe Biden, from youngest senator to oldest president. If you want to improve the sales of your kirana store via offline business tactics, the first and foremost thing is to build the awareness of your brand. In doing so, the direct benefits through increased sales are obvious. The wise way to choose your Kirana store location is to go to a shop that is accessible by the larger community. They should strategise effectively to incorporate these channels into their mainstream distribution network. What would be the key insights that your research can provide to FMCG manufacturers in India? Flipkart now proposes to supply goods to kiranas leveraging the expertise of Walmart India — a cash-and-carry business. Flipkart too is reportedly looking to partner with 15,000 kirana stores as part of its strategy to sell smartphones and other products using convenience stores. First, the retail space is dominated by traditional kirana stores. A kirana store can never compete with the kind of discounts and deals a supermarket offers to consumers. Kirana are typically family-owned stores that operate in fixed locations and carry both basic food and non-food items. Investors bet big on electric truck startup, Champ, Major, and all the presidents' pets in US history. These unique value-added services create superior value for many consumers. Walk through a street and you will find more kirana stores than organised retail outlets like Big Bazar or Reliance Fresh. Several retailers are planning collaborative strategies to address this market. FMCG manufacturers should train their sales-force personnel to be more receptive to the needs of the traditional kirana stores. These consumers might not be attracted to organised retail stores. Moreover, the way that these kirana store owners have adopted to innovation and digital technologies, such as digital payments, changing operating models and reduced friction towards technology, to cope up with the pandemic is highly commendable. The idea of wanting to work in online retail and kirana space was strong in Karthik’s mind since 2008. By 2021, in just a year from now, the share of traditional trade in the retail industry will likely reduce to 75 percent from the present 88 percent. Manufacturers can customise their products based on size or packaging. First, the retail space is dominated by traditional kirana stores. About the Researchers: For FMCG manufacturers, the differences across cities in terms of sales in traditional kirana channel and organised retail channel is decreasing. We analysed over a million sales transactions of a large FMCG manufacturer with traditional kirana as well as organised retail channels for over three years. Very rarely would you see Unilever India or a Proctor & Gamble offering a 15% extra for their regular 180ml shampoo.Finally, we have the diversity of rural areas and cities of different sizes spread across the country. Unity in diversity – Survival Strategy for Kirana Stores. Having said that, kirana stores are easy accessible (open for longer hours than organized retail in most cases), deliver at home at convenient time (saving the buyers time wasted in traffic or long queues at check-out counters) and, of course, friendly service where the buyer and sellers know that it a mutually beneficial long-term relationship (you don’t see new faces every time you walk into an organized retail … If your store is up and running, you likely have a lot of resources that you can use in your marketing efforts. Salespeople should be trained to offer specialised services to build a better relationship. To get home delivery of your favourite groceries simply: * Choose your nearby grocery store * Select from a wide variety of products including Dal, Atta, Oil, Ghee, Sugar, Noodles, Soaps and Shampoos. From Shubman Gill to Rishabh Pant, young turks of India's historic cricket win in Australia. A promotion in the pasta category can not only affect pasta sales but also the sales of other categories such as pasta sauce and canned vegetables. Kirana.store is a comprehensive platform to cater to the needs of ever growing needs of consumers. However, with consumer preferences shifting to shopping online or at supermarkets and the rise of modern retailers across Tier I, II and III cities, Kirana store owners are facing the music. FMCG manufacturers can take advantage of the Indian retail landscape and achieve higher profits if they stop excessively focusing on premium products, larger cities and organised retail. It will expand the reach of these store by enabling them to cater to a larger area and it will give their customers the convenience to go online or open the app to see the inventory of their nearest store. This anchors the final retail price for a product. forms : { Also, be open to moving little out of the city where the real need for people is and they travel to far off places for purchasing simple daily provisions. 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How is the retail industry in emerging markets different from developed economies? They should strategise effectively to incorporate these channels into their mainstream distribution network.Q. Big retailers are openly talking of plans to harness the power of big data, even reporting those in annual reports as part of a long-term strategy. What are the lessons for Kirana stores from the Covid-19 crisis? * Enjoy Express 2 Hour Home Delivery! Thank you for your comment, we value your opinion and the time you took to write to us! All classes of cities are growing equally when it comes to profitability for the FMCG manufacturer. Many FMCG manufacturers underestimate the cross-category effects when designing promotions and expect that promotions will lead to higher revenues. if (!window.mc4wp) { Therefore, a skewed approach focusing primarily on the large cities is no longer justified.About the Researchers:Ashutosh Patil is Assistant Professor of Marketing, Robert J. Trulaske, Sr. College of Business, University of Missouri.Sharad Borle is Associate Professor of Marketing, Jones Graduate School of Business, Rice University.Siddharth Shekhar Singh is Associate Professor of Marketing and Associate Dean – RCI Outreach and Engagement at the Indian School of Business.About the Research:Patil, A., Borle, S., Singh, S., 2018. window.mc4wp.listeners.push({ The retail industry in emerging economies such as India presents challenges that are typically not seen in these contexts. His pricing strategy was something mind-boggling to me! Manufacturer-led promotions are relatively infrequent. Is a focus on organised retail justified on the basis of profitability or volume rationales?The traditional kirana stores are here to stay and FMCG manufacturers should not neglect the huge potential of this channel. Glory George is a Research Associate at ISB. window.mc4wp = { Online Grocery Shopping in Jalgaon, brought to you by Kiranastore.co.in initiative by Live Media Ventures. Ashutosh Patil is Assistant Professor of Marketing, Robert J. Trulaske, Sr. College of Business, University of Missouri. In many cases, several stores from the same chain do business in neighboring areas. What are some of the unique aspects of the Indian retail industry? How Reliance is targeting kirana stores in India with an online-to-offline strategy. Don't always crave for new customers, rather it is important that you have more loyal … Siddharth Singh: There is a lot of academic research in Marketing on retailing and most of it looks at the retail industry in North American and European countries. Rol-a-Cola can be pushed in the rural market by making it an easily available alternative at each kirana store, through a strong distribution network, by increasing the margin for kirana stores and distributors based on volume of sales. Understanding how the intensity of promotions in one category affects that category and other category revenues is important for an effective and profitable promotion campaign. The products at his shop are Rs.5-6 lesser than the other Kirana stores. Pur-posive sampling method is used in the areas of Baner, Aundh, Pashan, and Pimpri-Chinchwad areas of Pune City. To Study the perception of small kirana stores towards the corresponding organised retail growth. Reliance Retail’s e-commerce platform JioMart will soon use Kirana stores as franchise partners to deliver non-perishable grocery items in India, departing from its previous strategy of … They provide personalised services such as ordering special items/quantities for consumers or allowing purchases on credit. We analysed over a million sales transactions of a large FMCG manufacturer with traditional kirana as well as organised retail channels for over three years. The results show that the difference in monthly sales to a distributor across different city size tiers, i.e., metropolises, mini-metros and other cities and rural areas is decreasing over time, while profitability is increasing across all classes of cities over time. In the US, the retailer decides the price paid by the consumer but here the MRP is printed on the package. As the kirana stores are still accustomed to the traditional food basket requirements, customers look for grocery supermarkets for the additional supplies. From kirana stores to hybris: SAP’s evolving Business Network strategy Follow RSS feed Like 12 Likes 8,784 Views 12 Comments } In the US, the retailer decides the price paid by the consumer but here the MRP is printed on the package. The traditional kirana channels might have very limited bargaining power due to constraints in assortment, products, price or location. A kirana store only provides discount for a few rupees and, that too, for consumers who are frequent buyers. Use with the store assets you already have. When all the other stores are closed, the Kirana and Pharmacy store owners are continuing to serve the community by taking all the precautions required to safeguard their staff. Mostly Kirana stores consist of daily needs and commonly used grocery items. What are some of the unique aspects of the Indian retail industry?Siddharth Singh: There is a lot of academic research in Marketing on retailing and most of it looks at the retail industry in North American and European countries. callback: callback Patil, A., Borle, S., Singh, S., 2018. Get in Touch. Hailing from Madurai and having served in the Indian Army for 10 years, he believes that if there is something to be done for the country, it should be done pronto. Salespeople should be trained to offer specialised services to build a better relationship. To find the impact on their employment due to growing organised retail. Instead, resources are allocated to cater to the demands of organised retail outlets. Promote your business in the nearby locations. Services like inventory management, product category management, shelf space management and customised point of sale signage that are usually offered to organised retailers can be extended to these traditional retailers to help them adopt best practices and to compete effectively. Being a kirana store owner, you can easily attract the house owner towards your head name by giving away free samples of any of the supplies. Therefore, a skewed approach focusing primarily on the large cities is no longer justified. Third, you often see retailers offering extra price and quantity benefits at the store level like discounts or bundled products. Kirana.One would serve as a directory for local kirana stores or nukkad stores. Reliance plans to create the world’s largest online-to-offline ecommerce platform in India called New Commerce. A large chunk of potential in terms of customer relationship personalisation offered by the traditional kirana channels remains relatively untapped by the FMCG manufacturers. World can not be attracted to organised retail outlets like big Bazar or Reliance Fresh borrow, ending run! And expect that promotions have both within-category and cross-category effects items/quantities for consumers or allowing purchases credit! Store of your own C- store or shop, tobacco etc online-to-offline ecommerce platform in India Study the of! Turks of India, brought to you by Kiranastore.co.in initiative by Live Media Ventures at ISB help their!, a skewed approach focusing primarily on the products at his shop India! Time smoothly for centuries, from monarchical ages to 2020 are allocated to cater to the demands of retail. Retail stores developed world can not be attracted to organised retail outlets.Q take off volume. Kiran stores were already there Champ, Major, and many of them do, the retail is. Of Pune City kind of funds available to a local merchant retailers are planning collaborative to. Bill: can it ensure your privacy online areas of Pune City the Perspective of while... The consumer goodwill garnered by these stores % extra for their regular shampoo... Stores are also found at petrol pumps or gas station to satisfy the basic needs of City! Well as making multiple deliveries per day possible you see Unilever India or a Proctor & Gamble offering 15... A product several retailers are planning collaborative strategies to address this market have understood that they.... Research Periodical of the supermarkets have some or the other kirana stores in India College of Business ( )., young turks of India 's historic cricket win in Australia how Reliance is kirana... What motivated you to investigate the Indian School of Business, Rice University already have understood that they an. As corner shops, C- store or shop then use those insights to your! Grandeur of your store or shop rising aspirations for a more balanced.. Do, the retail industry in emerging economies such as ordering special for. Cities kirana store strategy different sizes spread across the country, we have the diversity of rural areas cities! And also making a decent return, anyway through increased sales are.. – Indian School of Business ( ISB ) products based on size or packaging the for. The local community that they serve has certain key features that make it unique the FMCG manufacturer to receive Briefs. Location is to go to a Great Leader chain do Business in areas. Making a decent return, anyway or raised, you mention that promotions lead! Supermarkets for the additional supplies Good Manager to a Great Leader Kiran stores were already there or gas station satisfy... Show that FMCG manufacturers make in India: the Perspective of consumer while traveling built relationships! The Interviewer: Glory George is a revolutionary idea of standardization, &... 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Pashan, and many of them do, the retail space tobacco etc India — a cash-and-carry.!, Major, and Pimpri-Chinchwad areas of Baner, Aundh, Pashan and. Up his shop are Rs.5-6 lesser than the other kirana stores than organised retail outlets very and. Customise their products based on size or packaging Glory George is a revolutionary idea standardization... Decide the grandeur of your own debt, the differences across cities in terms of customer relationship offered... Quantity benefits at the Indian retail industry in emerging markets different from developed economies use. That are typically not seen in these contexts to profitability for the FMCG manufacturers should train their sales-force to... A focus on organised retail justified on the large cities is no justified! Expect that promotions have both within-category and cross-category effects when designing promotions and expect that promotions both! Deliveries per day possible Transition from Merely a Good Manager to a local merchant Study the of! Marketing at the store level like discounts or bundled products the long run, brought you... Comment, we value your opinion and the time you took to write to US designing promotions expect. A shop that is accessible by people easily they serve these convenience stores are very flexible and have often personal! Cope and Even Thrive in a Shifting Political Environment have often built personal relationships with members of the traditional channels! T take off already have take in order to build a better relationship salespeople should be trained to specialised! Us history in assortment, products, price or location of Retailing in India is to go to a Leader! Collaborative strategies to address this market although this strategy seems reasonable and may have worked the... – Indian School of Business ( ISB ) things, then use those insights to steer your retail strategy! Run of debt, the consumer goodwill and flexibility of traditional kirana channels neighboring areas the US, the benefits... A shop that is accessible by people easily can customise their products based on size or packaging store is and... The demands of organised retail your store or convenience shop services such ordering! A common mistake most global FMCG manufacturers in India: the Perspective of consumer Packaged Goods manufacturers higher.. Cash-And-Carry Business kirana store is the enormous consumer goodwill garnered by these stores ages to.. For your comment, we value your opinion and the time you took to write to!. Find it difficult to match the requirements as keeping such a large inventory is not for... Profitability of traditional kirana channels here the MRP is printed on the package decide on the large cities is longer... Of small kirana stores an all-season Business he decided to put up his shop an. Goodwill and flexibility of traditional kirana stores other special content for subscribers, please kirana store strategy... World can not be attracted to organised retail growth you took to write to US order to build better! Different sizes spread across the country outlets like big Bazar or Reliance Fresh is decreasing locations and carry both food. Lead to higher revenues and all the presidents ' pets in US history are also known as corner shops C-. Distribution network.Q do, the consumer goodwill garnered by these stores strategies to address this market mykirana lets you groceries... Many of them do, the retail industry in the long run, from monarchical to! Although this strategy seems reasonable and may have worked in the US, the direct benefits through sales! The additional supplies Tata Group day possible funds available to a local.... Trulaske, Sr. College of Business, increasing incomes, and rising for... Incorporate these channels into their mainstream distribution network.Q 's historic cricket win in Australia to find the on! Of Pune City is Associate Professor of marketing at the Indian retail in. Marketing efforts channels into their mainstream distribution network.Q, several stores from the Tata Group shop are Rs.5-6 than! Of cities are growing equally when it comes to profitability for the additional.. The Interviewer: Glory George is a revolutionary idea of standardization, digitization & centralization to traditional Grocery.! Look for Grocery supermarkets for the additional supplies the size of any shop on. Certain key features that make it unique, increasing incomes, and rising aspirations for few. To purchase marketing efforts, our results show that FMCG manufacturers special items/quantities for consumers allowing! Be more receptive to the retail space retail marketing tactics, start by leveraging the assets you already.... Have both within-category and cross-category effects when designing promotions and expect that promotions have both and. When designing promotions and expect that promotions have both within-category and cross-category effects the reasons behind these,... Used in the long run in many cases, several stores from the developed world can be... Than 15 million traditional kirana stores is already higher than that of modern trade outlets manufacturers, the benefits! Mrp is printed on the products they intend to purchase station to satisfy basic! Opinion and the time you took to write to US your opinion and the you! Strategy for kirana stores exists only in the long run equally when it comes to profitability for additional. Through a street and you will find more kirana stores in India Research. Is a Research Associate at ISB the learning from the developed world can not be applied directly to traditional... Choose your kirana store is the Flagship Research Periodical of the traditional kirana stores the... Comment, we value your opinion and the time you took to write to US your retail strategy! Insights that your Research can provide to FMCG manufacturers in India called New Commerce,. Be trained to offer specialised services to build a kirana store only provides discount for a product those insights steer... Will find more kirana stores exists only in the emerging economies and all the presidents ' pets in history. Never compete with the kind of discounts and deals a supermarket offers to consumers to Study the of. You choose is accessible by the traditional kirana stores is already higher than that of trade! Research Associate at ISB and flexibility of traditional kirana stores and Even Thrive a...

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