Can modern trade & kiranas survive the digital surge?

Walk through any Indian neighborhood today, and the change is obvious. Where kirana shops once dominated, the buzz of delivery bikes from Blink it, Zepto, and Swiggy Instamart has become just as common. At the same time, giants like Amazon and Flipkart are reshaping shopping habits with doorstep convenience and aggressive pricing.

Is the growth of e-commerce and quick commerce gradually destroying modern trade and kirana businesses in India? Or, is this digital growth simply forcing them to evolve?

According to the Retailers Association of India, modern trade penetration has plateaued at around 12–13% of the retail market—far behind e-commerce, which is growing rapidly. A significant shift is also visible in consumer behavior: many shoppers now prefer browsing online even while standing inside physical stores, using price comparison apps before making a final purchase.

India’s e-commerce market reached $147.3 billion in 2024, with Tier-2 and Tier-3 cities now contributing nearly 60% of demand. Meanwhile, the quick commerce segment alone is expected to grow at a 50% CAGR between 2022 and 2027. The question now is whether this rapid digital rise is eroding modern trade and kirana businesses—or simply forcing them to evolve.

Organized modern trade formats such as supermarkets and hypermarkets were once positioned as the biggest challengers to kiranas. Yet, footfall in brick-and-mortar stores has declined as online platforms offer greater convenience, faster delivery, and deeper discounts. Reliance Smart, Big Bazaar (before its collapse), and other chains have had to pivot to omni-channel models, offering home deliveries and app-based ordering to stay relevant.

A significant shift is also visible in consumer behavior: many shoppers now prefer browsing online even while standing inside physical stores, using price comparison apps before making a final purchase. This “webrooming” effect is forcing modern trade players to rethink pricing strategies and loyalty programs to retain foot traffic.

Kirana stores—estimated to number over 12 million and accounting for 88% of India’s retail sales—remain deeply entrenched in daily life. They thrive on hyperlocal trust, credit facilities, and personalized service. However, quick commerce apps now target the same neighborhood convenience with 10–20 minute deliveries of groceries and essentials. This threatens to chip away at kirana loyalty, especially among younger, digitally savvy consumers.

Yet many kiranas are not vanishing—they are digitally transforming. Platforms like JioMart, Udaan, and ONDC are onboarding small retailers, offering them digital catalogs, supply chain efficiencies, and payment solutions. Over 1.5 million kiranas have already adopted digital payment systems, and a growing number use WhatsApp for orders or collaborate with delivery platforms. This shift is empowering kirana owners to retain their customer base more effectively by blending personal trust with digital tools. Many have started using basic CRM apps and hyperlocal advertising to attract repeat customers. In addition, collaborations with fintech and logistics startups are helping kiranas offer credit, loyalty rewards, and faster home deliveries—allowing them to compete more directly with organized e-commerce players.

India’s retail market, valued at over $950 billion annually, is too vast for any single format to dominate. E-commerce and quick commerce are reshaping consumer behavior, particularly in urban and semi-urban areas. Modern trade is being forced to evolve, adding digital touchpoints and experiential in-store formats. Kiranas, with their hyperlocal trust and adaptability, are transitioning into hybrid models—part offline, part online. The real picture may not be one of outright “destruction” but of rebalancing. E-commerce and quick commerce will continue to expand, modern trade will consolidate, and kiranas will increasingly integrate into digital ecosystems. The winners will be those who combine scale with trust, speed with familiarity, and technology with personal service.

India’s retail story is not about one format replacing another—it’s about integration and coexistence. While e-commerce and quick commerce are rewriting the rules with scale and speed, kiranas and modern trade players are staying relevant through digital adoption. Rather than being destroyed, traditional formats are being reshaped—ensuring that India’s diverse consumer base is served across both digital and physical touchpoints.

The author is Consultant, Strategic Business & E-commerce, Hamdard Foods India.