Sunday, September 29, 2024

Q-commerce Killing Small Kirana Retailers

Quick-commerce (Q-commerce) is undeniably transforming the retail landscape, particularly in the grocery sector. With faster delivery times, increased convenience, and competitive pricing, it has swiftly captured a significant share of the market. However, while this shift benefits consumers and the growing e-commerce industry, it's having detrimental effects on small Kirana retailers across India.
Kirana stores, which make up 90% of the total grocery retail market in India with an estimated 12.6 million outlets, are facing immense pressure. Most of these small, family-run businesses operate on thin margins. Around 70% of Kirana retailers generate less than ₹2.5 lakh in monthly sales, earning a gross profit of about ₹30,000. After expenses, their take-home profit often falls below ₹15,000 per month. Given this financial strain, upgrading their stores, adopting new technology, or competing with the convenience and speed of Q-commerce seems nearly impossible.

Q-Commerce Growth: A Threat to Kirana Stores

According to a RedSeer report, the Q-commerce market in India is projected to reach $5.5 billion by 2025, a substantial increase from its current size. In 2023 alone, the gross merchandise value (GMV) of quick-commerce reached $2.3 billion, showing a growth rate of over 70% from the previous year. The contribution of Q-commerce to the online grocery market is expected to jump from 10% to 45% in the coming years. FMCG companies are already witnessing double-digit growth through these platforms.

As these platforms gain momentum, the shift in consumer behavior is becoming evident. Urban consumers, especially millennials and Gen Z, are increasingly turning to apps that promise delivery within minutes, ditching the traditional Kirana store. This is where the real challenge lies for small retailers.

Challenges for Kirana Retailers

The Retailers Association of India (RAI) has emphasized that instead of complaining about the rise of Q-commerce and e-commerce platforms, small retailers should focus on upgrading themselves. While this advice may seem reasonable on the surface, the reality is far more complex for Kirana store owners.

1. Lack of Capital: Most small retailers simply do not have the financial bandwidth to invest in technology, inventory management systems, or delivery infrastructure that could help them compete with the Q-commerce giants. Upgrading stores requires significant capital investment, which most Kirana retailers cannot afford.


2. Limited Access to Technology: Even if some Kirana owners are willing to embrace technology, they may lack the digital literacy to use the tools effectively. Many are not well-versed in inventory management software, e-payment solutions, or customer relationship management systems.


3. High Operational Costs: Q-commerce platforms benefit from economies of scale and significant backing from investors, allowing them to offer heavy discounts, absorb delivery costs, and optimize supply chains. Kirana stores, however, operate with high operational costs relative to their income. For them, matching the pricing and delivery speeds of Q-commerce platforms is financially unviable.


4. Consumer Shift: As consumers gravitate toward convenience, Kirana stores are being left behind. Younger, tech-savvy consumers now prefer the ease of ordering groceries through an app rather than visiting a local store. This shift is exacerbating the plight of Kirana stores, as they struggle to retain their customer base.

4.Threar for Local and region Brands: 
The rise of Q-commerce is a growing threat not only to Kirana retailers but also to local and regional brands that rely on them for distribution. Traditionally, these brands have secured space in Kirana stores through personal relationships and local marketing efforts, allowing them to compete with larger FMCG companies. However, as Q-commerce platforms, driven by speed and convenience, gain market share, these smaller brands are struggling to find space.

Q-commerce platforms prioritize well-known brands, and their limited inventory selection leaves little room for new or regional players. Furthermore, the high listing costs and monopolistic practices make it even harder for local brands to get featured. With 70% of Kirana retailers earning less than ₹2.5 lakh monthly, many may not survive, leading to a reduction in the availability of regional products.

As Kirana stores face increasing pressure, local brands risk losing their primary sales channels. This will result in a homogenization of the market, with fewer choices for consumers. The lack of government and industry intervention to support Kirana retailers and regional brands could leave the grocery market dominated by large corporations, reducing competition and undermining the unique, diverse consumer experience.

Government and Industry Response: Lacking Clarity

The Indian government has not yet formulated a comprehensive plan to assist these small retailers in adapting to the changing landscape. While there are initiatives such as 'ONDC' (Open Network for Digital Commerce) to integrate small retailers into the digital economy, their reach is limited, and awareness among small shop owners is low.

Investors, startup founders, and stakeholders in the Q-commerce and e-commerce sectors seem largely unconcerned with the fate of these small businesses. The focus remains on growth, innovation, and consumer satisfaction, with little attention paid to the livelihoods of the millions of people dependent on Kirana stores for their survival.

The Future for Kirana Retailers: Bleak Without Intervention

Without substantial support, it is difficult to envision how small Kirana stores will survive in the long term. While some may manage to upgrade and integrate with digital platforms, the vast majority will likely be unable to keep pace with the rapid changes in the industry. The social and economic impact of this could be devastating, especially in rural and semi-urban areas where Kirana stores serve as a primary source of income and provide essential services to the community.

The rise of Q-commerce represents a significant shift in how consumers shop for groceries, but it also threatens the existence of millions of small retailers. Unless meaningful intervention is made by the government and industry stakeholders, the survival of Kirana stores hangs in the balance.

In conclusion, the rapid growth of Q-commerce presents an existential threat to India's traditional Kirana retailers and the local and regional brands that rely on them. While Q-commerce has transformed the grocery shopping experience with convenience and speed, it has placed immense pressure on small retailers, many of whom lack the capital and technological capabilities to compete. As consumers shift towards app-based shopping, Kirana stores struggle to maintain their customer base and profitability.

Moreover, the rise of Q-commerce has also marginalized smaller, regional brands that depend on Kirana stores for shelf space and visibility. These platforms prioritize larger, well-known brands, leaving little room for local products, which could lead to market homogenization and a loss of consumer choice.

The Indian government and industry stakeholders have yet to devise a comprehensive strategy to help these small businesses adapt. Without intervention, the future of both Kirana retailers and local brands looks bleak. Protecting the diversity and accessibility of the grocery retail market will require significant efforts from both policymakers and industry leaders to ensure that small retailers and regional brands are not left behind in this rapidly changing landscape.

Written by Balwant Singh Rana
Parjakalyanm@gmail.com 

Friday, September 27, 2024

Big name is playing unsafe game. Pesticides in Indiagate Rice

The Hidden Danger of Pesticides in Packaged Rice: A Wake-Up Call to Consumers

The use of pesticides in food production has long been a controversial topic, with large corporations often caught in the crosshairs for prioritizing profits over consumer health. One notable example is the rice industry, where brands like India Gate dominate the market. With a 60% market share in consumer-packaged rice—ranging from 1kg to 10kg varieties—India Gate is an industry giant. However, the practices these large companies use to maintain their product quality have raised concerns, particularly regarding the use of dangerous pesticides to keep their rice free from pests like weevils.

In yesterday news, food safery department discovered that Indiagate is using dangerous pesticides in their rice brand. 
https://www.freepressjournal.in/business/india-gate-basmati-rice-recalled-due-to-excess-pesticide-krbl-shares-dip-by-over-15



In contrast, many smaller, local, or regional brands are refraining from using these harmful chemicals, but this often leaves their products more vulnerable to pest infestation. Due to changes in atmospheric conditions or improper storage, their rice can sometimes develop weevils or other pests, and unfortunately, this has led to a marketing angle that shopkeepers often exploit. They claim that India Gate rice is superior simply because it doesn’t succumb to pest damage—without addressing the underlying reason why: the use of hazardous pesticides. This scenario raises critical questions about the trade-offs between food safety and health, and it’s time to challenge the notion that pesticide-treated rice is a safer or higher-quality product.

The Pesticide Problem in Packaged Rice

Pesticides are chemicals used to kill or deter pests like insects, rodents, and fungi, which can spoil crops and reduce yields. In the case of rice, weevils and other pests are a common problem, particularly during storage. Companies like India Gate use pesticides not just during cultivation but also during storage and packaging to ensure their rice reaches consumers free of pests. The use of pesticides helps maintain the aesthetic appeal of the rice and protects the product from damage, but this comes at a significant cost to consumer health.

According to studies, certain pesticides commonly used in food storage, such as methyl bromide, phosphine, and chlorpyrifos, are known to have adverse effects on human health. These chemicals can leave residues on the rice, which are then ingested by consumers. Long-term exposure to pesticide residues has been linked to a range of health problems, including respiratory issues, endocrine disruption, reproductive harm, and even cancer.

For instance, a 2020 study published in the Journal of Agriculture and Food Chemistry found that pesticide residues in rice samples exceeded safe limits in certain regions. This poses a significant health risk to consumers, particularly those who consume rice daily, as is common in many countries, including India. Furthermore, some of the pesticides used in rice storage are not easily removed through washing or cooking, meaning consumers may unknowingly be exposing themselves to harmful chemicals.

The Contrast: Local and Regional Brands

Local and regional rice brands often do not have the same resources or market influence as industry giants like India Gate. As a result, many of these smaller brands refrain from using pesticides, either because they cannot afford them or because they choose to market their rice as more “natural” or “organic.” However, this decision comes with its own set of challenges.

Without the use of pesticides, these brands are more susceptible to pest infestations, especially if the rice is not stored in ideal conditions. Changes in temperature and humidity can cause weevils and other pests to develop in the rice, leading to visible damage and sometimes a foul odor. While this may seem like a sign of inferior quality to the untrained eye, it is actually an indication that the rice has not been treated with harmful chemicals.

Unfortunately, this has become a marketing disadvantage for local brands. Shopkeepers and distributors often point to the presence of weevils in regional brands as proof that their rice is of lower quality, while India Gate and other large brands are touted as superior because their rice remains free from pests. In reality, this is a false comparison, as the reason for the absence of pests in the larger brands is due to their reliance on pesticides, not necessarily better rice quality.

Examples of Pesticide Use by Big Brands

The issue of pesticide use is not unique to India Gate. Many large food corporations around the world have been criticized for their reliance on harmful chemicals to preserve their products. For example, the U.S. rice industry has faced similar scrutiny over the use of arsenic-based pesticides in rice cultivation. A 2012 study by Consumer Reports found that many rice products sold in the U.S. contained potentially dangerous levels of arsenic, a known carcinogen. While not directly related to pest control, this example highlights how big brands often prioritize extending the shelf life and appearance of their products over consumer safety.

In India, pesticide use is widespread in agriculture, with rice being one of the most affected crops. The Pesticide Management Bill 2020 seeks to regulate the use of these chemicals, but enforcement remains inconsistent, and many harmful pesticides are still used in food production. For instance, endosulfan, a pesticide that has been banned in many countries due to its harmful effects on human health, was widely used in India for years before it was finally banned in 2011. Despite the ban, residues of endosulfan and other toxic pesticides have been found in food products, including rice, sold by major brands.

The Need for Safer Alternatives

The widespread use of pesticides in rice packaging and storage highlights a larger issue within the food industry: the need for safer, more sustainable methods of pest control. While pesticides may prevent weevil infestations, they also pose a serious risk to human health. It is time for food producers, especially large brands like India Gate, to take responsibility for the health of their consumers and explore alternative methods for pest control.

One alternative is the use of integrated pest management (IPM), which combines biological, physical, and chemical methods to control pests without relying solely on toxic pesticides. For instance, IPM techniques might include improved storage practices, the use of natural predators to control pest populations, and the use of non-toxic chemicals. Another approach is the adoption of organic farming methods, which prohibit the use of synthetic pesticides and instead rely on natural substances to control pests.

In addition to these alternatives, consumers should also be educated about the risks associated with pesticide use in food production. It is important to challenge the misconception that rice without weevils is automatically of higher quality. In reality, rice that has been treated with pesticides may be more harmful to health than rice that has been naturally affected by pests.

The Hidden Danger of Pesticides in Packaged Rice: A Wake-Up Call to Consumers

The use of pesticides in food production has long been a controversial topic, with large corporations often caught in the crosshairs for prioritizing profits over consumer health. One notable example is the rice industry, where brands like India Gate dominate the market. With a 60% market share in consumer-packaged rice—ranging from 1kg to 10kg varieties—India Gate is an industry giant. However, the practices these large companies use to maintain their product quality have raised concerns, particularly regarding the use of dangerous pesticides to keep their rice free from pests like weevils.

In contrast, many smaller, local, or regional brands are refraining from using these harmful chemicals, but this often leaves their products more vulnerable to pest infestation. Due to changes in atmospheric conditions or improper storage, their rice can sometimes develop weevils or other pests, and unfortunately, this has led to a marketing angle that shopkeepers often exploit. They claim that India Gate rice is superior simply because it doesn’t succumb to pest damage—without addressing the underlying reason why: the use of hazardous pesticides. This scenario raises critical questions about the trade-offs between food safety and health, and it’s time to challenge the notion that pesticide-treated rice is a safer or higher-quality product.

The Pesticide Problem in Packaged Rice

Pesticides are chemicals used to kill or deter pests like insects, rodents, and fungi, which can spoil crops and reduce yields. In the case of rice, weevils and other pests are a common problem, particularly during storage. Companies like India Gate use pesticides not just during cultivation but also during storage and packaging to ensure their rice reaches consumers free of pests. The use of pesticides helps maintain the aesthetic appeal of the rice and protects the product from damage, but this comes at a significant cost to consumer health.

According to studies, certain pesticides commonly used in food storage, such as methyl bromide, phosphine, and chlorpyrifos, are known to have adverse effects on human health. These chemicals can leave residues on the rice, which are then ingested by consumers. Long-term exposure to pesticide residues has been linked to a range of health problems, including respiratory issues, endocrine disruption, reproductive harm, and even cancer.

For instance, a 2020 study published in the Journal of Agriculture and Food Chemistry found that pesticide residues in rice samples exceeded safe limits in certain regions. This poses a significant health risk to consumers, particularly those who consume rice daily, as is common in many countries, including India. Furthermore, some of the pesticides used in rice storage are not easily removed through washing or cooking, meaning consumers may unknowingly be exposing themselves to harmful chemicals.

The Contrast: Local and Regional Brands

Local and regional rice brands often do not have the same resources or market influence as industry giants like India Gate. As a result, many of these smaller brands refrain from using pesticides, either because they cannot afford them or because they choose to market their rice as more “natural” or “organic.” However, this decision comes with its own set of challenges.

Without the use of pesticides, these brands are more susceptible to pest infestations, especially if the rice is not stored in ideal conditions. Changes in temperature and humidity can cause weevils and other pests to develop in the rice, leading to visible damage and sometimes a foul odor. While this may seem like a sign of inferior quality to the untrained eye, it is actually an indication that the rice has not been treated with harmful chemicals.

Unfortunately, this has become a marketing disadvantage for local brands. Shopkeepers and distributors often point to the presence of weevils in regional brands as proof that their rice is of lower quality, while India Gate and other large brands are touted as superior because their rice remains free from pests. In reality, this is a false comparison, as the reason for the absence of pests in the larger brands is due to their reliance on pesticides, not necessarily better rice quality.

Examples of Pesticide Use by Big Brands

The issue of pesticide use is not unique to India Gate. Many large food corporations around the world have been criticized for their reliance on harmful chemicals to preserve their products. For example, the U.S. rice industry has faced similar scrutiny over the use of arsenic-based pesticides in rice cultivation. A 2012 study by Consumer Reports found that many rice products sold in the U.S. contained potentially dangerous levels of arsenic, a known carcinogen. While not directly related to pest control, this example highlights how big brands often prioritize extending the shelf life and appearance of their products over consumer safety.

In India, pesticide use is widespread in agriculture, with rice being one of the most affected crops. The Pesticide Management Bill 2020 seeks to regulate the use of these chemicals, but enforcement remains inconsistent, and many harmful pesticides are still used in food production. For instance, endosulfan, a pesticide that has been banned in many countries due to its harmful effects on human health, was widely used in India for years before it was finally banned in 2011. Despite the ban, residues of endosulfan and other toxic pesticides have been found in food products, including rice, sold by major brands.

The Need for Safer Alternatives

The widespread use of pesticides in rice packaging and storage highlights a larger issue within the food industry: the need for safer, more sustainable methods of pest control. While pesticides may prevent weevil infestations, they also pose a serious risk to human health. It is time for food producers, especially large brands like India Gate, to take responsibility for the health of their consumers and explore alternative methods for pest control.

One alternative is the use of integrated pest management (IPM), which combines biological, physical, and chemical methods to control pests without relying solely on toxic pesticides. For instance, IPM techniques might include improved storage practices, the use of natural predators to control pest populations, and the use of non-toxic chemicals. Another approach is the adoption of organic farming methods, which prohibit the use of synthetic pesticides and instead rely on natural substances to control pests.

In addition to these alternatives, consumers should also be educated about the risks associated with pesticide use in food production. It is important to challenge the misconception that rice without weevils is automatically of higher quality. In reality, rice that has been treated with pesticides may be more harmful to health than rice that has been naturally affected by pests.

Conclusion: A Call for Change

The dominance of big brands like India Gate in the rice market has created a dangerous situation in which consumers are unknowingly exposed to harmful pesticides. While these chemicals may keep the rice free from pests, they pose a serious risk to human health. In contrast, smaller brands that refrain from using pesticides are often unfairly labeled as inferior, simply because their rice is more vulnerable to weevil infestations.

It is time for the food industry to prioritize consumer health over profits. Brands should invest in safer pest control methods and be transparent about the chemicals used in their products. At the same time, consumers should be aware of the risks associated with pesticide-treated rice and consider supporting local, pesticide-free brands. By making informed choices, we can push for a safer, healthier food system—one that values people over profits.

Conclusion 

The dominance of big brands like India Gate in the rice market has created a dangerous situation in which consumers are unknowingly exposed to harmful pesticides. While these chemicals may keep the rice free from pests, they pose a serious risk to human health. In contrast, smaller brands that refrain from using pesticides are often unfairly labeled as inferior, simply because their rice is more vulnerable to weevil infestations.

It is time for the food industry to prioritize consumer health over profits. Brands should invest in safer pest control methods and be transparent about the chemicals used in their products. At the same time, consumers should be aware of the risks associated with pesticide-treated rice and consider supporting local, pesticide-free brands. By making informed choices, we can push for a safer, healthier food system—one that values people over profits.


Sunday, September 15, 2024

Grocery Retail Trends in India – 2024


The grocery retail industry in India is experiencing dynamic growth and transformation, driven by the rapid digitization of commerce, changing consumer behavior, and evolving supply chain systems. As one of the fastest-growing retail markets globally, India’s grocery sector is benefiting from innovations across technology, sustainability, and localized retail practices. 

1. The Rise of E-Grocery and Omnichannel Retailing

The shift towards online grocery shopping is perhaps the most significant trend in India’s retail sector. With the rise of platforms like BigBasket, Grofers (now Blinkit), JioMart, and the grocery delivery services from Flipkart and Amazon, the Indian grocery landscape is moving toward an omnichannel experience. Consumers today expect a seamless blend of online and offline shopping, where they can switch between the two effortlessly.

However, unlike many Western markets, physical grocery stores still hold a dominant position in India due to deep-rooted cultural shopping habits. Retailers are finding ways to balance both—many Kirana stores are now embracing technology, integrating with e-grocery platforms to offer consumers digital convenience while maintaining the personal touch of neighborhood stores.

2. Kirana Stores Going Digital

India’s approximately 12 million Kirana stores continue to be the backbone of the country’s grocery retail sector. But as digital transformation sweeps across the industry, these traditional stores are upgrading their operations. With the support of startups like Udaan, Dunzo, and Reliance-backed JioMart, Kiranas are adopting digital payment systems, online ordering, and inventory management tools. 

Many brands today are focusing on creating a meaningful presence in the market by highlighting the benefits they bring to their channel partners. Jaipur-based grocery staples brand, Kirana King, is doing just that with a unique and strategic approach. Their idea revolves around providing quality premium products at competitive prices, not only to attract consumers but also to boost the earnings of every stakeholder in their distribution network—Kirana retailers, wholesalers, and other channel partners.

By offering high-quality products at market-competitive rates, Kirana King is increasing the profit margins for small retailers and wholesalers. This initiative ensures that every member in their distribution chain benefits, which strengthens the entire ecosystem. Kirana store owners, often working with tight margins, can now sell premium goods without overburdening their customers with higher prices, making it a win-win situation for all.

From a consumer perspective, this approach ensures they are not paying inflated prices for superior products. The result is increased customer satisfaction and loyalty while maintaining affordability. Kirana King's strategy exemplifies how brands can create value for both their business partners and end consumers, ensuring sustainable growth and mutual success in a competitive market.

This trend is beneficial for both store owners and consumers. Store owners are able to expand their customer base and streamline operations, while consumers gain the convenience of online shopping with the familiarity and trust of their local grocery store. In rural and semi-urban areas, where large supermarkets might be scarce, the digital empowerment of Kirana stores is bridging the gap between modern retail and traditional commerce.

3. Sustainability and Conscious Consumerism

In India, the demand for sustainable and ethically sourced products is growing, particularly among urban consumers. Shoppers are increasingly aware of environmental and social issues, leading them to choose organic products, locally-sourced goods, and packaging that minimizes plastic use.

Large retail chains like D-mart, Reliance Fresh, More, and many regional players are responding by stocking organic produce, reducing plastic packaging, and promoting eco-friendly alternatives. At the same time, small-scale and local brands are gaining traction by offering region-specific, sustainable products.

Retailers are also focusing on minimizing food waste through real-time inventory management, partnerships with food rescue organizations, and offering discounts on near-expiry products. The Indian government's emphasis on sustainability and waste reduction, such as the ban on single-use plastics, is further pushing the grocery retail sector to adopt greener practices.

4. Health and Wellness: The New Focus

Post-pandemic, Indian consumers are more health-conscious than ever. This has led to a rise in demand for organic foods, superfoods, and immunity-boosting products. Items like turmeric, A2 cow ghee, millet-based products, and Ayurvedic herbs are seeing a resurgence in popularity.

Retailers are capitalizing on this trend by stocking a wider variety of health-oriented products and offering exclusive sections for organic and natural foods. Patanjali, with its Ayurvedic and health-focused products, continues to expand, while global health brands are also entering the market to cater to this growing demand.

Furthermore, major supermarket chains and online platforms have begun offering personalized recommendations for healthier options, often based on the customer’s purchase history. This push toward healthier living is also in line with government initiatives like “Eat Right India,” which encourages the consumption of wholesome and nutritious foods.

5. Private Label growth 
The concept of private labels is gaining momentum in the Indian grocery retail market. Supermarkets and e-commerce platforms are increasingly focusing on developing their own in-house brands, offering customers more affordable options compared to established national brands.

For example, Reliance Retail, DMart, and, Blinkit, Zepto, Flipkart, BigBasket have successfully launched their own private labels in categories like packaged food, beverages, personal care, and home essentials. These private labels offer higher margins for retailers while providing cost-conscious consumers with good quality at a lower price.

In a price-sensitive market like India, the growth of private labels is a strategic move that helps retailers differentiate themselves and build brand loyalty. Discount retailing, led by chains like DMart, also continues to thrive, offering value-conscious consumers competitive prices without compromising on quality.

6. Expansion of Grocery Delivery and Quick Commerce

The rise of quick commerce, which promises grocery delivery within minutes, has gained significant traction in urban India. Platforms like Blinkit, Zepto, Swiggy Instamart, and Dunzo Daily are leveraging hyperlocal delivery models to cater to the need for instant gratification. These platforms offer quick delivery for essentials and smaller quantities of groceries, tapping into the fast-paced lifestyles of Indian consumers in metros.

Although quick commerce is still limited to Tier 1 cities, it is expected to gradually penetrate smaller towns as infrastructure and logistics improve. For retailers, partnering with these platforms can help expand their reach, while customers benefit from the convenience of near-instant delivery.

A bit of summary. 

The grocery retail industry in India is at a transformative juncture in 2024, with digitization, sustainability, health consciousness, and convenience at the forefront of change. The continued growth of e-grocery platforms, the digitalization of Kirana stores, and the rise of private labels are reshaping the way Indians shop for their daily essentials.

As these trends continue to evolve, grocery retailers in India will need to stay agile and embrace innovation to cater to the needs of a diverse and demanding consumer base. The future of grocery retail in India lies in blending tradition with modernity, ensuring both convenience and personalized service for customers across the country.

Motivational Quote:
"Success in retail is not just about selling, but about creating experiences that resonate with customers’ evolving needs."

Parjakalyanm - Fostering Bharat to new Dimensions

Empowering Bharat through One Nation, One Rule. Advocating UCC, NRC, and CAA in Bharat, and also supporting a two-party political system democracy instead of multi-party system

UCC

UCC
UCC

Citizenship (Amendment) Act, 2019

Citizenship (Amendment) Act, 2019
CAA