According to the report, the most prominent Market Players, namely Reliance, Amazon, Flipkart, want to help the retail outlets in their business. Some of them want to use these Kirana stores as last-mile delivery points while few want these retail outlets to buy their inventory, thereby pushing them to get rid of the traditional distributors.
This step is made to help the economy grow and make India a secure place to do business. Mukesh Ambani, Chairman of Reliance Industries, has announced in his recent annual meeting that his vision is to make living better of around 12 million Kirana store people with the help of the technology. This will make the working pattern of these stores easy, i.e., managing their billing, margins, inventory and other related benefits.
Reliance at present claims that they already have 25 lakh Kirana store people on-board, whereas Amazon and Flipkart have 23,000 and 17,000 Kirana store people respectively in their network.
Reality Behind the Story
The truth behind this scheme is, the Kirana store people are still under doubt or are sceptical in joining these big business giants. They don’t want to browse through the day because this may affect their customer who comes to their shop.
One of the retail store people responds that he is capable of dealing with the distributors and at the same time managing customers and thinks that using App on the store will lead to chaos and wastage of time. Additionally, the store people are of a view that these online platforms would not be able to cater to their need. The distributor with whom they have long-term relationships are aware of their business needs, what size and quantity of products are required and other things.
Issue of Credit with Organised Retailers
The main reason why the retail outlet peoples do not want to associate themselves with Organised Retailers is of Credit. The distributors with which they have been working till date give them week-long credit, however, if they collaborate with Amazon, Flipkart, Reliance or any other such platform they won’t be getting things on Credit.
Their business is working on credit; they buy on credit, sells it, and the money realised is then paid to the distributor. Roopchand Bagmar, who is the owner of the Kirana store in Nashik, says, “Distributors understand our needs. If I have a problem with a particular SKU, the distributor takes it back without asking too many questions; big retailers don’t take back inventory which we can’t sell,”.
The claim of Retail Industry
Experts of the Retail industry say that they don’t believe in the reasoning given by the Kirana store people for not joining the. According to them, the primary reason for them avoiding digitalisation is: they don’t want to disclose their earnings to the government as this will lead to paying more tax.
Further, they believe that to make Kirana store people join their network, they have to use different methods and means to make them understand how the technology will help them in managing their business.