The rise of 10-minute delivery services is putting immense pressure on local shops in India, prompting urgent calls for regulatory measures to support traditional retailers.
Is Rapid Online Delivery Disrupting India's Traditional Retail Market?
Is Rapid Online Delivery Disrupting India's Traditional Retail Market?
As quick commerce apps gain popularity, traditional corner shops are facing unprecedented challenges, leading to widespread closures.
In recent years, a seismic shift in consumer shopping behaviors has unfolded in India as rapid online delivery services, known as "quick commerce," gain a firm foothold. Established neighborhood shops, once vital community hubs, are struggling to compete against the convenience offered by apps like Zomato, BlinkIt, and Zepto. These apps allow consumers to receive products in as little as ten minutes, enticing them away from traditional retailers.
The impact is starkly illustrated by Ramji Dharod, the owner of a corner shop in Mumbai for over 75 years. Once bustling with customers, his store now stands almost empty, contributing to the sobering statistic of an estimated 200,000 neighborhood stores shuttering over the past few years. The impact of such rapid commerce becomes evident on the streets of cities like Chennai, where municipal stats reveal a 20% closure rate for small grocers and even higher for larger stores.
Retailers like Sunil Kenia, who runs a provision store near Dharod's, report similarly dire circumstances. He attributes his survival to family ownership, noting that those renting spaces can no longer sustain themselves. Business is reportedly down to half of pre-pandemic levels, with the majority of his earnings coming from wholesale transactions rather than individual customers who have largely migrated to online solutions.
The shift in consumer preferences echoed through a report from PwC, which indicated that 42% of urban consumers now favor online shopping for urgent needs. This adaptation has resulted in significant revenue declines for many retailers, with essential goods sales suffering a drop of over 50%. While some users appreciate the convenience, others, like graphic designer Monisha Sathe, do miss the personal connections and product variety offered by local vendors.
Despite the apparent struggle faced by corner shops, experts caution against oversimplifying the situation. Ankur Bisen, a partner at Technopak, pointed out that while general trade is undoubtedly threatened, the current landscape of quick commerce is largely an urban phenomenon. The model relies on densely populated areas, where "dark stores" stock goods for rapid delivery, but expansion into smaller towns may pose significant financial challenges.
Analysts from Bain and Company predict the growth of quick commerce could surpass 40% annually out to 2030, reinforcing concerns among traditional retailers about the ongoing viability of their businesses. Trade organizations like the Confederation of All India Traders have urged government intervention to address perceived anti-competitive practices like deep discounting that they argue skew the market in favor of larger players.
While companies like Swiggy, Zepto, and BlinkIt have refrained from commenting on these grievances, insiders argue that their services address real difficulties faced by customers, especially vulnerable groups seeking to avoid the complexities of in-person shopping. The narrative that quick commerce is a battle between corporate giants and small merchants oversimplifies a landscape where both sectors may need to coexist.
Retail experts assert that India’s vast diversity, in terms of economic development and infrastructure, indicates that a range of retail models will continue to exist. Although the rise of e-commerce was initially projected to threaten local shops back in 2010, these stores have surprisingly maintained a crucial role within the market—an indicator that the retail landscape may be more resilient than it seems.
As corner stores face unprecedented pressures, it is increasingly clear that traditional retailers must innovate or adapt to remain relevant in a rapidly changing marketplace. Integrating technology and enhancing the shopping experience for consumers will be essential as corner shops navigate the ongoing disruption triggered by quick delivery services.
The impact is starkly illustrated by Ramji Dharod, the owner of a corner shop in Mumbai for over 75 years. Once bustling with customers, his store now stands almost empty, contributing to the sobering statistic of an estimated 200,000 neighborhood stores shuttering over the past few years. The impact of such rapid commerce becomes evident on the streets of cities like Chennai, where municipal stats reveal a 20% closure rate for small grocers and even higher for larger stores.
Retailers like Sunil Kenia, who runs a provision store near Dharod's, report similarly dire circumstances. He attributes his survival to family ownership, noting that those renting spaces can no longer sustain themselves. Business is reportedly down to half of pre-pandemic levels, with the majority of his earnings coming from wholesale transactions rather than individual customers who have largely migrated to online solutions.
The shift in consumer preferences echoed through a report from PwC, which indicated that 42% of urban consumers now favor online shopping for urgent needs. This adaptation has resulted in significant revenue declines for many retailers, with essential goods sales suffering a drop of over 50%. While some users appreciate the convenience, others, like graphic designer Monisha Sathe, do miss the personal connections and product variety offered by local vendors.
Despite the apparent struggle faced by corner shops, experts caution against oversimplifying the situation. Ankur Bisen, a partner at Technopak, pointed out that while general trade is undoubtedly threatened, the current landscape of quick commerce is largely an urban phenomenon. The model relies on densely populated areas, where "dark stores" stock goods for rapid delivery, but expansion into smaller towns may pose significant financial challenges.
Analysts from Bain and Company predict the growth of quick commerce could surpass 40% annually out to 2030, reinforcing concerns among traditional retailers about the ongoing viability of their businesses. Trade organizations like the Confederation of All India Traders have urged government intervention to address perceived anti-competitive practices like deep discounting that they argue skew the market in favor of larger players.
While companies like Swiggy, Zepto, and BlinkIt have refrained from commenting on these grievances, insiders argue that their services address real difficulties faced by customers, especially vulnerable groups seeking to avoid the complexities of in-person shopping. The narrative that quick commerce is a battle between corporate giants and small merchants oversimplifies a landscape where both sectors may need to coexist.
Retail experts assert that India’s vast diversity, in terms of economic development and infrastructure, indicates that a range of retail models will continue to exist. Although the rise of e-commerce was initially projected to threaten local shops back in 2010, these stores have surprisingly maintained a crucial role within the market—an indicator that the retail landscape may be more resilient than it seems.
As corner stores face unprecedented pressures, it is increasingly clear that traditional retailers must innovate or adapt to remain relevant in a rapidly changing marketplace. Integrating technology and enhancing the shopping experience for consumers will be essential as corner shops navigate the ongoing disruption triggered by quick delivery services.
