Corner Shops will Die

As 10-minute online deli-veries by “quick commerce” apps like Zomato, BlinkIt and Zepto pervade urban India, hundreds of thousands of neighbourhood stores across cities have closed down.

A lobby group of consumer product distributors estimated that number to be 200,000 last October, while the municipal body of the southern city of Chennai estimated that 20% of small grocers and 30% of larger departmental stores had shut down in the city in the past 5 years.

.A recent survey by consultancy firm PwC shows some 42% of urban consumers in India’s big cities prefer quick delivery for their urgent needs. And these shifts in buying behaviour have led to three out of 10 retailers reporting a negative impact on their business, with a 52% drop in essential goods sales.

But to what extent is quick commerce really hollowing out the Indian high street?

There’s no doubt general trade, which includes grocery stores, corner shops and even big retail outlets, has come under threat. But at least for now, “quick commerce is still a three-four city story”. Nearly all of their sales come from these cities. But that is no consolation for small retailers as the online delivery is expanding rapidly like wildfire.

Lightning-fast deliveries bucked the global trend and became successful in India largely due to a large concentration of people staying in urban clusters.

They are serviced through low-rent “dark stores” - or small shops dedicated to delivery and not open to the public - in densely populated areas, enabling economies of scale.

But the precarious nature of demand and fragmented demographics of smaller towns could make it expensive for quick commerce players to expand and make money beyond the metros.

There’s little doubt, though, that these online deliveries will disrupt trade in the longer run.

Experts say quick commerce will grow at over 40% annually through to 2030, driven by expansion across “geographies”.

And this has made traditional retail nervous. Trade organisations - like the Confederation of All India Traders, or the All India Consumer Products Distributors Federation, which calls itself the voice of India’s 13m retailers–have made urgent and repeated pleas to the government against this breakneck expansion.

They allege that these companies are using billions of dollars in venture capital funds to engage in anti-competitive practices like “predatory pricing” or “deep discounting,” which has further distorted the playing field for mom-and-pop shops. Swiggy, Zepto and Blinkit primarily control this market.

Analysts, however, say the sheer diversity of India in terms of its stages of development, levels of income and infrastructure will mean that in the end all retail models - small corner shops, organised big retailers and quick commerce platforms - will cohabit in the country. But retail shop owners are not optimistic at all. They think their days are numbered.

E-commerce came into India in 2010 and was meant to sound the death knell of local retailers.

For one thing, the ripples caused by quick commerce should be a warning for physical retailers, say analysts, to improve their marketing and integrate technology to use both online and offline channels to give their consumers a better shopping experience.

Competing with click-of-a-button delivery means it can no longer be business as usual for the millions of corner shops that’ve existed for decades, with little or no innovation. Then e-commerce has created a huge army of gig workers who are not treated as workers as per the law. As a result, they are denied statutory rights granted to even contractual labourers who are at least covered by the Contract Labour Abolition Act 1972.

[Contributed by Nikhil Inamdar]

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Frontier
Vol 57, No. 46, May 11 - 17, 2025