Industry bodies urge the government to create a fair, competitive environment and empower local retailers with the right technology
Emphasising that the rapid rise of ecommerce and quick commerce platforms is causing a steep decline in income and livelihoods for thousands of local grocery and kirana shop owners, Indian retailers have appealed to the government to step in and provide a stronger support.
The Federation of Retailer Association of India (Frai), a representative body of about 80 lakh micro, small and medium retailers from across the country, organised an event in New Delhi to raise the issue. According to Frai, over the past few years, digital platforms have reshaped consumer behaviour through deep discounts, rapid delivery promises, and aggressive marketing campaigns, leaving small retailers struggling to compete on an uneven playing field.
The federation cited studies and highlighted that at least two lakh Kirana stores had closed last year as consumers had shifted to quick commerce platforms such as Blinkit and Zepto. Further, a December 2024 study by JP Morgan on offline grocery stores in Mumbai showed that 60 per cent of them have seen a decline in their sales volume due to the mushrooming of dark stores of quick commerce platforms.
“Small retailers and kirana shopkeepers are facing an unprecedented challenge as ecommerce and quick-commerce platforms reshape the market. These enterprises, built over generations, are now struggling to survive against players with deep pockets and aggressive strategies. We believe the government must urgently step in to create a fair competitive environment and empower local retailers with the right technology,” stated Abhay Raj Mishra, Member and National Coordinator, Indian Sellers Collective and Honorary Spokesperson, Frai.
Need For Support
The federation noted that there is an urgent need for a fair, well-designed support model that protects the interests of small retailers and local entrepreneurs. Without intervention, the backbone of India’s informal retail economy risks collapsing.
The retailers in the event urged the government to equip local Kirana stores with a dedicated technology platform that would enable them to compete fairly with quick-commerce companies and operate on equal footing. As a potential solution, the retailers proposed creating a Bharat taxi-like digital system where customer orders are routed to nearby Kirana shops, with the order going to the first store that accepts it.
Such a platform, they suggested, could also include a customer-rating feature for participating Kirana stores, motivating them to maintain high service standards and fostering healthy competition within the local retail ecosystem.
ONDC As A Solution
Frai highlighted that a powerful step in empowering small retailers is through the government-backed ONDC (Open Network for Digital Commerce). ONDC moves away from platform-centric monopolies by creating an open, interoperable network where any buyer and any seller can transact using any ONDC-compatible application.
For kirana stores, this means greater visibility, access to a wider customer base, lower operating costs and the freedom to choose different apps to list and sell their products. By providing a standardised digital infrastructure and eliminating dependence on a single dominant platform, ONDC fosters true digital inclusion, the federation noted.
By streamlining seller onboarding and offering practical, hands-on training, the network can empower local retailers to easily digitise their catalogues, manage inventory efficiently and deliver orders with confidence. Continued focus on retailer enablement, smoother operational processes, and a more seamless consumer journey will help ONDC unlock its full potential as a powerful catalyst for inclusive growth in the retail sector, the official statement noted.
Zepto’s Rise Amid Intense Competition
Highlighting that 25 Lakh fast-moving consumer goods (FMCG) units get processed through automated assets across the company’s supply chain every day, Aadit Palicha, the Co-founder and Chief Executive Officer (CEO) of Zepto, has stated that the company has scaled automation operations pan India.
“Over the past 12 months, our operations and tech teams have meticulously implemented automation across our backend supply chain. Today, I am excited to announce that we have scaled automation operations pan-India,” Palicha wrote in a LinkedIn post.
Palicha added that this has translated into a 45 per cent improvement in manpower productivity (outbound), when compared to manual operations. It has resulted in hundreds of crore of annual operating cost savings for our business, he noted.
Quick Commerce And Health Concerns
A new survey by community platform LocalCircles indicates that close to half of the packaged food items available on India’s major quick-commerce and online grocery apps fall into the junk, HFSS (high fat, sugar or salt) or ultra-processed category.
The findings are based on more than 24,000 responses from parents of Gen Z across 277 districts. Men accounted for 63 per cent of the participants, while women made up 37 per cent.
According to the report, nearly 50 per cent of packaged food products listed on leading delivery apps qualify as HFSS or ultra-processed, with some platforms reporting even higher levels. Items in this category range from biscuits, chips and chocolates to instant noodles, sugary beverages, candies and similar heavily processed snacks. The assessment covered eight platforms, which are Amazon Fresh, Flipkart Minutes, BigBasket, JioMart, Zepto, Blinkit, Swiggy Instamart and MilkBasket.
Shedding light on the ‘pain and misery’ of India’s gig workers, Raghav Chadha, an Aam Aadmi Party (AAP) Rajya Sabha member, has demanded regulations on quick commerce and app-based delivery and service businesses, in favour of gig workers. While speaking in Parliament, the MP pointed out that although the official definition refers to them as gig workers, he calls them the invisible wheels of the Indian economy. He noted that these workers deserve dignity, protection and fair pay.
“I am speaking about the delivery boys of Swiggy and Zomato, drivers of Ola and Uber, riders of Blinkit and Zepto, plumbers and beauticians of Urban Company. Today, many ecommerce, Insta-delivery apps and companies have upped their valuations and become unicorns, but the conditions of these gig workers are worse off than daily wage labourers,” he added.
Gen AI And Loss Prevention
A significant majority of retail leaders (84 per cent in Asia-Pacific, including India) cite the importance of Generative artificial intelligence (AI) and automation solutions in their loss prevention efforts, as per the findings of the18th Annual Global Shopper Study by Zebra Technologies.
Shopper satisfaction has dipped for the second consecutive year for both in-store and online experiences. This is a decline from the highest satisfaction levels recorded in 2023 (81 per cent in Apac, including India). More than seven out of ten shoppers (74 per cent in Apac, including India) prioritise discounts and promotions due to inflation pressures.
Simultaneously, consumers are frustrated with operational issues, such as out-of-stocks, locked-up products, and a lack of self-checkout lanes, the study showed. As kirana stores struggle to keep pace with well-funded digital platforms, industry groups warn that the absence of decisive support could accelerate job losses and trigger long-term structural damage
