Indian kirana stores feel the heat as quick commerce sees rapid rise

In Bengaluru, a couple on a grocery run stopped by a local fruit and vegetable vendor but walked away after finding the prices higher than those on quick commerce apps. The shopkeeper argued the difference was negligible—just Rs 5-6—but eventually gave in to their demands to close the sale.

A similar scene unfolded at a nearby kirana store, where a customer hesitated to buy dishwashing liquid, citing better discounts online. These encounters are no longer isolated. Across urban India, quick commerce platforms are nibbling away at the local kirana’s customer base.

While the dominance isn’t complete, the shift is undeniable. According to a Datum Intelligence report, over 82% of consumers have moved at least a quarter of their kirana purchases to quick commerce platforms, and 5% have stopped shopping at kiranas altogether. This trend is poised to grow, reshaping the retail landscape but making kiranas suffer.

Speaking to Ravi B S, an owner of a local provision store in Bengaluru, the sales have impacted but mostly from the younger generations. The older generation still prefer going out and shop. “The working class coming to our shop has reduced a bit but our loyal customers who are coming to us for years, still come to us and they say, they don’t believe in buying through apps and pay extra money on deliveries.”

But, the trend is fast changing.

As of CY24, India’s grocery market continues to be dominated by unorganised retail, with kirana stores commanding a significant 92% share. Despite the rapid rise of organised retail and e-commerce, kiranas continue to be the backbone of the sector. However, the growing popularity of quick commerce is driving a notable shift, with more customers moving from kiranas to online platforms, according to a report.

Amid this transition, the Confederation of All India Traders (CAIT) has raised alarm bells over the practices of quick commerce platforms. In a recently released White Paper, CAIT highlighted the alleged misuse of Foreign Direct Investment (FDI) by these platforms to disrupt India’s retail ecosystem. Speaking at a press conference, CAIT Secretary General and Chandni Chowk MP, Praveen Khandelwal, accused quick commerce players of exploiting FDI to dominate suppliers, control inventory, and fund predatory pricing tactics. “These strategies create an uneven playing field, making it nearly impossible for India’s 30 million kirana stores to compete. Small retailers are being aggressively pushed out of the market,” Khandelwal stated.

The White Paper revealed that quick commerce platforms, backed by over Rs 54,000 crore in FDI, have prioritised subsidising operational losses, controlling supply chains, and offering steep discounts through select preferred sellers over investing in long-term infrastructure. These practices have helped quick commerce players capture 25-30% of the grocery market previously dominated by kiranas.

Alok Agarwal, Co-founder of Kiko Live, pointed out the tangible impact on small retailers. “Over two lakh kiranas have shut down due to the aggressive expansion of dark store-led quick commerce. In metros, it has already taken away over 40% of kirana business. If kiranas don’t digitise and offer similar quick commerce services, these platforms could soon capture 70-80% of the market in urban areas.”

While experts believe the success of quick commerce is largely confined to India’s top 15-20 cities, its impact on kiranas in these areas is alarming. In response, some kiranas are adopting home delivery models to retain customers, but given their limited scale and resources, competing with well-funded quick commerce players remains a significant challenge.