Amazon or Walmart or anyone for that matter can never beat the local Kirana stores as far as India is concerned.
Even this piloting will fail because, they will shower these local kirana stores with offer. There will be no other reason for a kirana store to join these amazon network. They will also be happy to follow a swiggy type model where they will accept orders through amazon and one amazon delivery partner can come and collect the items and deliver it to the customers. But this wont be profitable for amazon .
Vaitheeswaran K launched an unique e-com portal Fabmall. I still remember ordering one KG of rice online on the end of 2001 or 2002 (to test how it worked) where they delivered the rice from a Mambalam store (i think) and our residence was 15 Km away. Again the distance and time is a problem when it comes to business like this. I was fascinated at that time on this concept as it was an awesome and unique concept as far as India was concerned..
Always there will be a kirana store opposite to our house (within 10 to 100 meters). But when ordering online , these companies will try to source orders from vendors who are more than 100 metres to 1 km away from our house. This depends on the number of vendor signups that these companies are able to achieve in each area. Its not easy to convince all the vendors in every area. The local vendors also will have an association in which they are part of. The resistance will be very tough.
Most of these kirana shops also would not be properly registered and so its not easy to keep track on them. Besides these already existing challenges, the bigger challenge is the Indian household. Also as far as grocery is concerned, there are 4 types as far as Indian household is concerned.
- One – Instant need (The mom or wife will suddenly ask for certain items)
- Two – Tomorrows Need (The mom will plan on what to cook tomorrow)
- Three – Ready to wait (Where groceries will be bought on a monthly basis. This segment can order them online).
- Loyalty and “Can water” sentiment.
The third segment already has a lot of online competitors. The second segment might be lucarative opportunity for these online companies.
The 4th segment can never be challenged.
Amazon aims to create habit formation into its target audience. What is habit formation? In Sanskrit its called as Vasana. There are 2 types of vasanas.
- One forced Habit
- Natural habit.
Forced habit – THe best example for forced habit is water. Ground water/well water/river was consumed directly in India. This was the natural habit of Indians till 30 to 40 years before. But due to rapid corruption of ground and natural water, consuming “can water” is unavoidabe habit nowadays.
Natural habit: Indians love to gossip. They generally build bond with these local shop owners. These shop owners have trust factor because of which they usually deliver water supply (“Can water”) to the households.
This natural habit will be tough to change for them. Amazon’s habit forming will be a failure because of this natural habit. The customers will surely order online groceries as long as they get offers. But these kirana vendors wont be affected, because for immediate and tomorrow’s items, Indians will still go to these vendors.
As I have told before:
[contentcards url=”https://sarathy.in/2019/04/24/will-amazon-retail-force-local-grocery-stores-to-shut-shop/”]
The news Item related to my article:
[contentcards url=”https://www.linkedin.com/feed/news/amazon-to-ally-with-kirana-stores-3930817/”]
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