The traditional kirana store, a cornerstone of Indian retail, is facing competition from a new breed of tech-savvy, self-service outlets that have gained momentum in the aftermath of the COVID-19 pandemic. Companies like Frendy, SuperK, and Kirana King are leveraging technology to modernize neighbourhood stores and capture a growing share of the fast-moving consumer goods (FMCG) market.
These new entrants are not just small players; they have rapidly expanded their presence across India. Frendy from Gujarat, Telangana’s SuperK, Bihar’s Apna Mart, and Rajasthan’s Kirana King have emerged as significant competitors to the traditional kirana stores, contributing to 4% of total FMCG sales, a sharp increase from less than 1% pre-pandemic. In premium product categories, their contribution is even more substantial, reaching up to 10%.
Unlike the manual operations typical of kirana stores, these modern outlets utilize digital apps for everything from order placement to inventory management, enhancing efficiency and the customer experience.
Industry Response
“These are akin to modern trade stores but are much smaller in size. There has been a rise in such stores, with approximately 10,000 outlets across India now providing stiff competition to larger retail chains like Reliance,” said Krishnarao Buddha, Senior Category Head for Marketing at Parle Products, a leading Indian food company.
Despite the presence of established smaller supermarket chains such as Ratnadeep, Vijetha, and Patel’s R Mart, the number of franchise-led grocery stores has surged, particularly in smaller towns. For instance, Frendy, which started just four years ago, now operates 25 outlets and supplies 2,000 micro-kiranas. Similar growth stories are seen with Kirana King and SuperK, each running 100 outlets, and Apna Mart, which has 50 outlets.
Innovative Business Models
Frendy co-founder Sameer Gandotra explained their hub-and-spoke supply chain model: “Our in-house suite of digital apps includes point-of-sale software that is digitally connected to a central warehouse for automatic stock replenishment, ensuring shelves are always full. The customer app allows for digital ordering and delivery, with all transactions, including payments and returns, trackable via the app.”
Global and Local Trends
Globally, small-format stores like 7-Eleven in Japan, Lawson in Japan, and Oxxo in Mexico dominate their markets despite competition from larger chains. In India, new-age retail chains have capitalized on this trend by leasing properties formerly occupied by smaller format stores like EasyDay and More, thereby retaining and expanding their customer base.
Investment and Growth
These startups have attracted significant investment. Frendy has secured $5 million, SuperK $6.5 million, Apna Mart $13 million, and Kirana King $1 million. Other chains, like Osia Hypermarket and Ondoor, have raised funds through small and medium enterprise IPOs.
Companies are leveraging these tech-enabled stores to launch new products, taking advantage of their data-driven insights and consumer engagement capabilities.
New Consumer Experiences
“It’s a growing channel for us, offering a new experience where consumers can pick up products themselves. This is great for new product launches, as it provides direct consumer exposure. For newer products, these outlets account for about 8–10% of the sales,” said Vineet Agrawal, CEO of Wipro Consumer Care and Lighting.