Neighborhood Stores Face Closure Amid Online Shopping Surge
As the popularity of quick commerce apps like Zomato, BlinkIt, and Zepto continues to rise, thousands of neighborhood stores in India are shutting their doors. Long-standing establishments, such as Ramji Dharod’s corner shop in Mumbai, are struggling to compete with the convenience of online shopping. Reports indicate that over 200,000 small retailers have closed in recent years, with many more at risk as consumer habits shift dramatically.
Long-Standing Shops on the Brink
Ramji Dharod has been running his corner shop in Mumbai for over six decades, serving the local community for 75 years. However, the once-bustling store now sits nearly empty, with Dharod often waiting for customers who rarely arrive. “I wouldn’t get a minute to breathe a few years ago, but now I rarely get anyone coming,” he lamented. The impact of online shopping is evident, with cardboard boxes of unsold goods marking a “stock clearance sale” in his store.
As quick commerce apps dominate the market, traditional retailers are feeling the strain. A lobby group of consumer product distributors reported that around 200,000 neighborhood stores had closed by October 2022. In Chennai, municipal estimates indicated that 20% of small grocers and 30% of larger departmental stores had shut down in the past five years. The rapid rise of online shopping is reshaping the retail landscape, leaving many small businesses struggling to survive.
Changing Consumer Preferences
Sunil Kenia, who operates a provision store next to Dharod’s, shared similar concerns. He noted that his business has declined significantly since the COVID-19 lockdowns, with retail sales dropping to 50% of pre-pandemic levels. Most of his current revenue comes from wholesale customers, as individual shoppers have largely vanished due to the convenience of mobile deliveries.
Urban consumers like graphic designer Monisha Sathe have embraced the ease of online shopping, often opting for quick deliveries over traditional market visits. “Lugging groceries back home was a big pain,” she explained, highlighting the challenges of navigating crowded market streets. While she misses the personal interactions with local vendors, the convenience of online shopping has proven too appealing to resist. A recent PwC survey revealed that 42% of urban consumers prefer quick delivery for urgent needs, further illustrating the shift in buying behavior.
The Future of Retail in India
The rise of quick commerce has raised questions about the future of traditional retail in India. Ankur Bisen, a partner at Technopak retail advisory, acknowledged the threat posed to general trade, including grocery stores and larger retail outlets. However, he emphasized that quick commerce remains concentrated in major cities, where it has thrived due to urban population density. The model relies on “dark stores”—small, delivery-only shops that cater to densely populated areas, allowing for rapid service.
Despite the current dominance of quick commerce, analysts warn that its expansion into smaller towns may face challenges due to varying demographics and demand. Nevertheless, Bain and Company predicts that quick commerce will grow at over 40% annually through 2030, prompting traditional retailers to adapt. Trade organizations have voiced concerns about the aggressive expansion of online delivery services, alleging anti-competitive practices that threaten the survival of small shops.
Calls for Government Intervention
Trade bodies, including the Confederation of All India Traders, have made urgent appeals to the government to address the rapid growth of online delivery apps. They argue that these companies are leveraging substantial venture capital to engage in practices like predatory pricing, which further disadvantages small retailers. While quick commerce companies have refrained from commenting on these allegations, insiders claim that discounting is primarily driven by traders on their platforms.
Despite the challenges posed by quick commerce, experts believe that various retail models will coexist in India. The diverse nature of the country’s economy means that small corner shops, organized retailers, and online platforms will all play a role in the future of retail. However, traditional retailers must innovate and integrate technology to enhance their offerings and compete effectively in an evolving market.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
