Mom-and-Pop kirana stores are small, family-run retail shops located at every part of country, be it urban or rural, that serve as the backbone of India’s grocery retail sector. They are deeply embedded in local communities and offer convenience, personalized service, and credit facilities to regular customers. Efficiency of these stores are very high and they are able to stock variety of items and SKU in their small shop with limited capital. Operating model of these stores are owner cum operator with limited number of relatively low-cost employees. In most of the cases these shop owners also own the physical premises of the shop.
Over the past three decades, the Indian retail industry has undergone significant transformations. With each wave of change, there were doubts about the survival of traditional kirana stores. The first major shift occurred post-liberalization when organized retail began expanding in India. Supermarket chains like Subhiksha, Spencer’s, Spinach, Big Bazaar, Star Bazaar, More, Reliance Retail, and D’Mart emerged as key players in the grocery sector. However, 34 years since 1991, many of these brands have faded due to profitability and survival challenges. Even today, the dominant players collectively control less than 10% of the overall retail market. Meanwhile, reports suggest that the retail industry as a whole is expected to grow at a 10% CAGR.
The next disruption came with the rise of e-commerce, offering customers attractive deals, doorstep delivery, and a wider product selection. Initially, e-commerce significantly outperformed traditional retail through heavy discounts and promotions. However, as platforms reduced discounts and introduced delivery charges, growth in the sector began to slow. Now, 15 years into its evolution, the e-commerce growth rate has fallen below 15%, with further deceleration expected before stabilization. Despite generating billions in revenue and gross merchandise value (GMV), major e-commerce platforms continue to struggle with profitability.
The third wave of disruption has rapidly emerged with the rise of quick commerce (Q-commerce), reshaping the delivery landscape by making a vast range of products—from groceries to cosmetics—available within minutes. This segment is experiencing exponential growth, with the number of players set to double following the entry of new brands like Tej, Minutes, and Pincode.
Beyond enhancing convenience, Q-commerce has significantly influenced consumer behavior. Purchases have become more impulsive and immediate, eliminating the need for advance planning or a fixed buying window. Estimates suggest that in a short span, the Q-commerce market has already surpassed $3.3 billion in 2024. Projections indicate that its share in major FMCG sales will rise from the current 2% to 10–15% in the coming years.
While Q-commerce has added immense value for consumers and is driving rapid market growth, it is unlikely to become a silent killer for conventional retail. Several factors suggest that traditional retail will continue to hold its ground:
Planned Purchases: Indian households have long followed the practice of planning grocery shopping in advance. For such purchases, the need for 10-minute delivery is minimal, making Q-commerce less relevant.
Delivery Fees & Discounts: As Q-commerce platforms introduce service fees or reduce discounts, a segment of buyers is likely to shift away. Unlike food delivery, where margins are higher and MRP is not explicitly fixed, Q-commerce operates under tighter pricing constraints.
High Operating Costs: Q-commerce players compete with mom-and-pop stores, which operate with significantly lower overhead costs, making long-term profitability a challenge.
Brand Loyalty & Discount Limitations: Private-label brands have lower acceptance rates, and established brands may resist offering deep discounts to a single sales channel.
As the initial buzz around Q-commerce subsides over the next five years, the industry is expected to undergo structural changes. The segment will continue to hold some grounds in urban upper- and middle-income groups, but operating model may shift towards white-label dark stores along with industry consolidation. In the long run, Q-commerce will likely stabilize at a modest share of the retail sector, potentially in the high single-digit percentage range.