Is Quick Commerce Leading To Quick Erosion Of ‘Kirana’ Ecosystem?

The Shift

For most of urban India, especially metropolitan and tier 1 cities, venturing out for buying everyday essentials like grocery and ration seems like a yesteryears’ thought. Thanks to the present-day shopping phenomenon called quick commerce. While e-commerce provides convenience to customers, quick commerce has combined convenience with speed and has created a modern-day genie that answers all the ‘lack of time’ issues of the ever-busy urban Indians, caught in the clutches of fast paced, hectic lifestyles, the never-ending to-do lists and the hustle and the bustle of day-to-day life.

A recent Datum Intelligence study (a Gurugram-based business consulting company) reveals a shift in consumer preferences toward quick commerce platforms, with 46% of respondents reporting a reduction in their purchases from traditional Kirana shops. The report highlights the rapid growth of quick commerce platforms, driven by changing consumer behaviours, urbanization, and digital adoption. Platforms such as Blinkit, Zepto and Swiggy Instamart have capitalised on their promise of delivering essentials within 10–30 minutes, reshaping how groceries are purchased and consumed.

The Impact

And so, the traditional kirana stores are feeling the heat. The market share of traditional Kirana stores in India is steadily declining as quick commerce platforms are gaining market share, according to another study by Datum. The report says that Kirana stores' market share fell from 95% in 2018 to 92.6% in 2023 and is projected to drop further to 88.9% by 2028.

What’s more, the report predicts a 74% growth in the quick commerce segment in 2024, making it the fastest-growing retail channel during the 2023-28 period. With a compound annual growth rate (CAGR) of 48%, quick commerce is poised to revolutionise the grocery market.

It says, "quick commerce is expected to increase the channel shift from Kirana to online grocery.” Over 82% of the buyers have shifted at least 25% of their purchases from kirana stores to quick commerce platforms. The data from the survey reveals that 5% of the respondents have completely stopped buying from kirana stores.

The report stated, "prior to the advent of quick commerce, Kirana stores were the primary destination for unplanned grocery purchases due to their convenient locations and flexible operating hours."

But with customer priorities shifting, it is no surprise that metro cities have experienced the greatest impact of quick commerce with 90,000 kirana stores shutting down in these areas alone, compared to 60,000 closures in Tier-I cities in the recent months. India currently has approximately 13 million kirana stores, with over 10 million located in Tier-II and smaller cities.

The All-India Consumer Products Distributors Federation (AICPDF) announced recently that quick commerce’s rapid growth in India has led to around 2,00,000 kirana stores shutting down over the past year. Expressing deep concern over the situation, the federation noted that sales at kirana stores during the festive season gone by remained stagnant. On the other hand, a recent report by Financial Express indicated that direct-to-customer brands reported up to 250% higher festive sales on online platforms compared to the previous year.

“This alarming trend not only impacts countless families dependent on these small businesses but also signals a broader threat to India’s traditional retail backbone. The pressures from quick commerce platforms and modern trade formats have created a challenging environment for local kirana stores. These emerging players often leverage advanced technology, deep discounts, and rapid delivery models that traditional shops struggle to match, creating an unfair competitive landscape. As a result, our local kirana stores, which have long been pillars of convenience and affordability in communities, are increasingly vulnerable. The current economic slowdown has further compounded these challenges, limiting consumer spending and creating an unsustainable situation for small retailers. A slowdown in demand has affected inventory turnover, leaving kiranas struggling to maintain profitability amid rising operating costs”, observes Dhairyashil Patil, National President, AICPDF.

Future of India’s Traditional Retail Structure, The kirana shops

As quick commerce booms and thrives, the humble age old kirana shops are struggling to survive and make ends meet. AICPDF strongly believes that the survival of the kirana ecosystem is essential for maintaining India’s rich retail diversity and providing affordable access to consumer goods across rural and urban areas alike. “We urge the government and industry stakeholders to recognize the importance of these local businesses and take immediate action like creating supportive policies that protect and empower traditional retail in the face of aggressive tactics by quick commerce and modern trade players; introduce regulations that curb deep discounting and unfair trade practices that threaten the viability of small retailers and provide financial assistance or incentives to kirana stores to help them modernize and adapt to changing consumer demands”, says Dhairyashil Patil, National President, AICPDF.

The industry too is rooting for the kirana ecosystem and considers it to be an indispensable participant in the flourishing Indian retail story.

“As quick commerce and e-commerce platforms continue to rise—projected to reach a valuation of $100 billion by 2025—the dynamics for traditional kirana stores are undergoing a significant transformation. With approximately 12 million kirana stores contributing nearly 80% of India’s grocery market, these small retailers play a crucial role in both the economy and community structure. However, the growing competition from digital platforms presents considerable challenges. It is essential to create a balanced ecosystem where kirana stores can thrive by adopting digital tools that enhance their efficiency and reach. Supporting these small businesses is vital not only for preserving livelihoods but also for sustaining the vitality of local economies”, observes Gaurav Marya, Chairman, Indian Small Business & Franchise Association (ISFA).

Though the FMCG companies are adjusting their product offerings by pack sizes, pricing, and consumer preferences to balance kirana, quick commerce and modern trade interests; the competition between kirana shops and quick commerce has intensified off late.

 Quick Growth projections for Quick Commerce

While industry bodies and govt need to come up with policies and regulations to protect the kirana ecosystem and provide it with armour to compete with quick commerce rivals; these quick commerce platforms are growing from strength to strength, re-defining the Indian retail landscape.

Quick commerce is expanding rapidly in major cities, with platforms such as Blinkit, Swiggy Instamart, Zepto, BBNow (from Big Basket) are delivering groceries and essentials to customers within 10-12 minutes, which has attracted significant consumer interest.

Global brokerages forecast that India's quick commerce market will grow to $6 billion by 2025, a significant increase from its negligible level just three years ago. Nearly 40% of online grocery sales now come from quick commerce, with the segment growing 230% between 2021 and 2023, led by Blinkit, Instamart and Zepto.

This stupendous rise of quick commerce is reason enough for many e-commerce big-wigs to toe the line. Flipkart entered the quick comm space recently with its express delivery service called ‘Flipkart Minutes’. Amazon is gearing up to launch its express delivery service code named ‘Tez’ by December end. It is reportedly exploring the possibility of acquiring a stake in Swiggy, particularly in its quick service platform- Instamart as well.

Flipkart owned fashion and accessories platform Myntra also piloted foray into quick commerce with its service 'M-Now' in select parts of Bengaluru just a few days back. "We launched M-Express earlier, towards enhancing the customer-experience with regard to speed and have been experimenting with a pilot for faster delivery in a select few pincodes. We will look at expanding it further based on the insights gained, before launching it formally," a Myntra spokesperson told PTI.

Beauty major Nykaa too launched a 10-min delivery pilot in select pincodes of Mumbai recently. FirstCry, mother and baby care products retailer, started same-day delivery service in about 40 cities across India in November.

The Road Ahead

The Datum report points out that an estimated USD 1.28 billion worth of kirana sales is expected to move to quick commerce platforms in 2024, accounting for 21% of the latter's total sales. That’s because quick commerce has offset traditional retail's high channel costs by eliminating intermediaries and replacing them with streamlined delivery systems.

As long as delivery costs remain lower than savings from channel consolidation, these platforms can offer competitive prices, further eating into Kirana stores' market share. This shift indicates the challenges faced by Kirana stores in adapting to changing consumer behaviour, driven by convenience, speed and cost-effectiveness offered by quick commerce.