FRAI Calls on the Government to Give Kirana Stores Better Technology Platforms to Fight Qcom Companies

Nitin Konde, Varun Bhardwaj

Dec 27, 2024 — 3 min read

FRAI Urges Government to Empower Kirana Stores with Technology

In order to help physical businesses contend with the influx of rapid commerce platforms, the Federation of Retailer Association of India (FRAI) has called on the government to develop an "enhanced technology platform." According to a news agency report, the merchants' body stated that such assistance would help the kirana stores stay competitive in the face of rapid commerce startups like Swiggy, Instamart, Blinkit, or Zepto encroaching on their market. The Open Network for Digital Commerce (ONDC) was praised by the FRAI, but it stated that a specific solution is required to make local kirana establishments visible and reachable by consumers.

According to the body, this would level the playing field and allow these kirana shops to compete on an equal basis with "10 minute" delivery systems. According to FRAI spokesperson Abhay Raj Mishra, it is now necessary to take a more targeted approach to developing a particular solution for kirana stores that makes them as discoverable and accessible to customers as possible, similar to how quick commerce companies are functioning, given the new technologies introduced by the government, such as ONDC.

Kirana Stores Operators Struggling to Survive

According to reports, MP and Confederation of All India Traders (CAIT) secretary general emeritus Praveen Khandelwal pointed fingers at quick commerce operators, stating that kirana outlets are "facing steep challenges" as a result of the increasing number of quick commerce firms. Khandelwal stated that rapid commerce platforms are undercutting small stores with their enormous warehouses, large client bases, and deep finances, and that it is imperative that retailers "stay updated and embrace all channels" in order to fulfil the changing demands of their customers.

Additionally, he said that these online marketplaces have an "unfair advantage" over kirana shops, and that shopkeepers' revenues have stagnated as a result of increased competition from rapid commerce operators, particularly during the festival season when demand is at its highest. The remarks are made at a time when quick commerce players have significantly increased their operations and presence over the last year due to rising demand. Zomato, the company that runs Blinkit, obtained around $1 billion earlier this year through qualified institutional placement (QIP) to support its rapid commerce goals, even if Zepto raised more than $1.3 billion in 2024.

More Fierce Competition Ahead

The competition will increase as more businesses try to join the fast commerce trend, which will make things worse for kirana shops. Amazon has plans to launch its rapid commerce platform early next year, while Flipkart joined the "10 minute" delivery race earlier this year with Minutes. For a while now, retailer associations have been keeping an eye on quick commerce platforms.

The All India Consumer Products Distributors Federation (AICPDF) lodged a complaint against rapid commerce companies, which the Department for Promotion of Industry and Internal Trade (DPIIT) forwarded to the Competition Commission of India in September. Quick commerce companies were also charged by CAIT last month with encouraging aggressive pricing, breaking competition laws, abusing FDI regulations, and gaining near-monopolistic control over supply chains.