Amazon may add kirana stores to its cart to boost retail play

Amazon has been acquiring tiny stakes in other Indian brick-and-mortar chains.

New Delhi: Amazon is said to be getting ready to rope in kirana stores as part of its retail strategy. Reliance Retail already aims to court millions of such shops as part of its “new-commerce” multi-channel retail play. Amazon’s plan is smaller in scale, said people with knowledge of the matter — signing up tens of thousands of neighbourhood stores to sell products through its ecommerce platform.

To begin with, Amazon plans to enrol small mobile phone sellers on its platform and will eventually scale it up to others selling everything from food to general merchandise, according to a person familiar with the plan.

Amazon has tied up with ShopX, a Bengaluru startup that digitally connects kiranas with large retailers and fast-moving consumer goods (FMCG) companies.

“We have long worked to enable small and medium businesses, including kirana stores, with pioneering programmes such as AmazonEasy, I Have Space, Service Partner programme, among several others,” an Amazon spokesperson said in an email. “While we continue innovating for this ecosystem, we have nothing new to announce at the moment.”
 
The person didn’t answer queries on the partnership with ShopX or its plans. A ShopX spokesperson declined to comment.

Amazon is the latest to court neighbourhood small stores to sell products. ET had reported in May that rival Flipkart was piloting a project in Telangana partnering about 800 small shopkeepers to sell mobile phones through its app.

The Walmart-owned company plans to use 15,000 small convenience stores, beauty salons, bakeries and pharmacies, among others, to sell smartphones, a product such shops normally don’t stock.

As ecommerce expands in India, online firms are tapping into the robust network of an estimated 12 million mom-and-pop outlets to be used as last-mile delivery agents or even to sell products through them as part of omni-channel strategies. Modern retailers including ecommerce only account for about 10% of India’s $650 billion annual retail market with small traders holding sway over 90% of the business.

“The bulk of the business still flows through the traditional retail channels. So, if you coopt with kiranas, you are addressing two issues,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight. “One is that you are bringing kiranas on the digital trend and secondly you are passing the message that we are not harming but helping the small retailers.”

The person cited above said the mobile phone sellers will initially go live on Amazon.in, followed by the other kirana segments.