New-age, self-service kirana stores are transforming India's retail dynamics

livemint.com:

kiranas, dominate with a 90% share of the Indian grocery retail market. Meanwhile, organized retail, or modern trade, introduced about two decades ago, has gradually expanded due to its vast product range, self-service, and shopping experience. The differences between modern and traditional retail centre on store formats, product range, technology, and digital integration.

Modern trade is viewed as tech-forward, while traditional trade embodies community-centered, credit-driven operations. However, with India's economic growth, digital evolution, and societal changes, kiranas, too, have been evolving. The "independent self-service store", an avatar of traditional trade, has grown rapidly in recent years, propelled by consumption increases, supply-chain enhancements, digitization, and a burgeoning partner ecosystem.

This consumption surge links back to a tenfold increase in per capita income from ₹15,000 in 2001 to over ₹1.5 lakh in 2021. This rise in income has been accompanied by a proportionate jump in consumption expenditure from ₹13 trillion to ₹123 trillion in the same period. It has led to an explosive growth in packaged goods which is expected to reach ₹10.13 trillion in 2025.

The packaged foods industry has also seen evolution of multiple categories like instant foods, frozen foods, dairy, snacks, beverages, cooking ingredients, and health foods. And a shift from cereal-driven diet to a protein-rich diet with milk and value-added milk products emerging as biggest commodity in value. Similarly, home and personal care category has also exploded, with the market growing 3.5 times from 2010 to ₹1.23 trillion in 2022.