It is also unclear what problem they are solving, says Singhal, as most kiranes are already taking orders via WhatsApp and entering customers ’doorstep. The only explanation, he says, is an excess of global capital seeking investment opportunities in an era of low interest rates. “For me, this excitement is due to this disengaged pressure from money, which is forcing these entrepreneurs to challenge economic sense,” he says.
There are few signs that the money taps will close soon, says Anand Ramanathan, a partner at Deloitte India. According to the World Economic Forum, investors have been throwing money at Indian startups for at least a decade, struggling to settle in a nation whose global consumer markets could be worth $ 6 trillion by 2030. “Some “Do these models make money? Is it sustainable? They’re not even close,” he says. “It’s all just a customer acquisition game.”
India has characteristics that can make it more suitable for fast trade than western countries. Indians buy groceries more often than shoppers in the developed world, says Zepto’s Palicha, and their busy cities allow them to reach large numbers of customers from a single dark store. “This model thrives on density,” he says.
There is evidence that in some of the largest cities in India, Kiranas are beginning to feel the pinch. In a residential neighborhood on the border of HSR Layout, an emerging suburb south of Bangalore that has become a major center of initiation, shopkeepers were unanimous that online shopping was reducing their profits. Ashraf Puncheehar says the business in his store has dropped 20% in the last six months. “Every day, new businesses are coming online,” he says. “You can’t compete with them.”
Even if Kiranas are unlikely to suffer widespread extinction soon, localized reductions are a possibility. This could lead to a process of what is known as “infrastructure exclusion,” says Aaron Shapiro, an anthropologist at the University of North Carolina at Chapel Hill. In the West, shifting from convenience stores to larger supermarkets has forced companies to abandon what they considered “unviable markets” in poor areas, resulting in “food deserts” where residents have limited access to healthy groceries and affordable. In India, the phenomenon could acquire a unique flavor. Mohammed Ryaz, a regular customer of a Chamrajpet kirana, says the store was a lifeline for less tech-savvy customers during the blockades. “These are not polite people, they don’t know how to place an order [online],” he says.
Another concern is the impact on delivery drivers. More than 80% of India’s economy is informal, meaning workers have no official employment contract and are not protected by labor laws. Therefore, for many Indians, concert work is not very different from their alternatives. But the unpredictability of wages due to sporadic work and incentive-based income still bothers many workers, says Aditi Surie, a sociologist at the Indian Institute of Human Settlements (IIHS). “It actually makes people feel that inner feeling of precariousness,” he says. “You have no way of really figuring out what will happen to your wages next month.”
A Dunzo dealer, who did not want to be named, said he did not care about the job and usually worked 12-hour shifts. But it’s only worth your time if you reach an incentive goal of 21 orders a day, which increases your salary by almost 50%. “It’s a waste if I don’t get any incentive,” he says. “All my efforts have been in vain.” It usually achieves the goal of eight to ten days a month.
A helping hand
Why, if India already has a hyperlocal trade network perfectly tailored to the needs of each community, would anyone have to spend money on building a new one? A number of “kirana tech” startups have decided that it is not necessary. Instead, they are building tools to help stores compete with the giants of modern retail. “We see this country’s Kirana store network as a national infrastructure likely comparable to electricity or rail networks,” says Prem Kumar, CEO of digital technology company Snapbizz.