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How India's neigbourhood grocery stores overcame the Covid challenge

February 19 2021: Leading Indian platform for the last mile of  fast moving consumer goods (FMCG), SnapBizz, has released a new report outlining the transformation that Kirana ( neighbourhood grocery stores) have gone through to fulfil the changing requirements of their consumers while facing a pandemic.
Themajority of Kirana stores have created  a system where customers can order via the internet or through an app, in an attempt to safeguard themselves from losing their customers to e-commerce platforms. The study also shows how in 2020 there was an increase in spends per bill reflecting more items in a bill, price rises and switching to more expensive items due to supply shortage during lockdown and migration of new shoppers with different shopping habits from modern trade to Kirana stores.  
The study analysed over 2 million consumer bills recorded in the SnapBizz network of Kirana stores spreads across 10 cities which include Delhi NCR, Mumbai, Pune, Ahmedabad, Bangalore, Chennai, Kolkata and Hyderabad. SnapBizz is backed by marquee VCs such as Jungle Ventures, Taurus, Blume Ventures and strategic investors such as Nielsen, Qualcomm, AUO and Mr. Ratan Tata.
Says Prem Kumar, Founder & CEO: “The consumer retail segment has witnessed rapid growth in terms of digitization of MSMEs in 2020. This was fuelled by the current COVID-19 era which brought in new opportunities in the retail sector specially for Kiranas. As a result, over a million Kiranas have gone digital in recent months and their stores have gone online by accepting online payments, ordering supplies online, managing inventory, etc. The technology cover now enables them to leverage their strengths like proximity, personal touch, and flexibility further to acquire new customers effortlessly.
Highlights of the Study:
-There was a spike of 50% in the share of spends in the food category in March but now it is coming back close to pre-COVID-19 levels even though it is still 18% higher than pre-lockdown days.
-The staples categories witnessed a surge in baskets and spends by 20% even though the store presence had a marginal increase in 2020 vs. 2019; possibly due to more people working from home and eating out was limited for the greater part of the year.  It was more consumption driven rather than price except for Dals & Pulses. The spends increased till Oct’20 however declined and went to pre-COVID-19 levels post that.
-Home deliveries increased and 75% stores are working towards going online
-80% of Kirana stores saw an increase in customers
- Banking sector has become very involved in the Kirana Eco-system
-The consumer spends on categories like Snack Foods, Biscuits and Noodles also increased by 25% in 2020 and the same trend was noted except for Biscuits where the spends dropped in Nov’20.
-The overall increase in consumer spends was primarily from the larger outlets than the smaller ones.
-Most of the retailers (more than 90%) were not supported by distributors in terms of larger credit line or longer credit period; Adding to the working capital problem, more than 50% retailers had difficulty in collection from customers. However, overall, the credit bills have remained stable in 2020 compared to the previous year.
-Digital payments were on the rise in 2020, more through payment apps, and a lesser rise through credit / debit cards which require more KYC formalities.
-The Kirana stores continue to leverage online ordering apps to cater to the current consumers. The number of consumers that ordered from grocery stores via SnapOrder mobile app increased by 5x as compared to Pre-COVID-19 levels.
SnapBizz is currently working closely with FMCG brands, distributors, wholesalers, e-commerce players (B2B/B2C), financial service players, consulting companies and Kirana stores to help bridge the information gap and find solutions based on the results of these reports. This analysis also helps Kirana stores better deal with their consumer requirements.
Headquartered in Bangalore, SnapBizz provides new age solutions to convert the neighbourhood Kirana stores into smart stores and enable them to leverage their current strengths to gain competitive edge and increase store profitability.
SnapBizz provides Kirana stores with easy-to-use solutions to manage and optimize store operations with products such as Snapbilling (touch-based billing solution), SnapOrder (online B2C app), SnapSupply (FMCG distributer app) and SnapPulse (retail analytics solution). With a presence in 7 major cities in India, they are today the only vertical platform exclusively for the FMCG Industry fulfilling last mile connectivity with Kirana stores its consumers and other stakeholders in the FMCG ecosystem. The stakeholders include FMCG brands, distributors, wholesalers, E-commerce players (B2B/B2C), advertising agencies, logistic players, and financial service players.The company presently has a network of 10000+ Kirana stores who collectively do a business (GMV) of approx. of $1 Billion/year.