India’s retail economy is still overwhelmingly dependent on its vast network of kirana stores — modest, family-run businesses that sell groceries and household staples. These shops, numbering an estimated 12 to 15 million across the country, represent nearly 88% of the total $900 billion retail market, according to the Confederation of All India Traders and data from BCG and the Retailers Association of India (2023). Their ubiquity masks a quiet challenge: how to remain relevant in a marketplace increasingly shaped by technology and platform-led commerce.
The shift to digital is no longer optional. For kiranas, embracing technology is not a matter of strategy but of survival. Their continued role in India’s consumption story now depends on how effectively they can integrate digital tools into their daily functioning — not to compete head-on with e-commerce giants, but to complement and collaborate with them on new terms.
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Technology that works from the ground up
The most sustainable digital transformation in traditional retail rarely involves sweeping changes or expensive systems. A recent 2024 study on Indonesia’s mom-and-pop warung shops illustrates that successful digitisation tends to emerge from functional, low-cost adaptations. Rather than replacing existing systems, shopkeepers deploy combinations of tools that align with their routines — such as pairing a mobile point-of-sale app with a low-end printer or using a swipe machine as a rudimentary kiosk for product discovery. What matters most is “task–technology fit” — ensuring the tool aligns with the daily operational rhythms of the store.
This approach resonates in Indian kirana stores as well. Owners who once managed ledgers manually now close daily sales using voice-enabled apps. WhatsApp has become both a sourcing platform in the morning and a credit management tool by evening. A new tool succeeds only if it helps reduce queues, prevents stockouts, or frees up time to negotiate with distributors. Utility, not flashiness, drives adoption. MBA-grade dashboards and complex interfaces, by contrast, often fall flat in these grassroots environments.
Platforms as partners, not predators
The rise of B2B platforms such as Udaan and ElasticRun underlines this point. These startups succeeded by bundling logistics, wholesale pricing, and credit into Android-based applications with local language interfaces. Their value proposition was not to displace the kirana but to empower it. Larger players have taken note. Reliance’s JioMart Partner programme, for instance, enables shopkeepers to digitise their product catalogues in minutes while retaining control over fulfilment and last-mile delivery. Trust remains local even as the interface becomes digital.
This blending of corporate reach with neighbourhood familiarity points to a more nuanced model of retail modernisation — one that extends the reach of kiranas rather than eroding their importance. The smart money, it appears, is no longer betting on disruption, but on enablement.
Localising the omnichannel playbook
Globally, large retailers have been trying to master the omnichannel experience — the seamless blending of physical and digital retail. An influential 2021 review of 50 academic studies by Gerea et al. identified five core attributes of a successful omnichannel strategy: connectivity, integration, consistency, flexibility, and personalisation. India’s retail innovators are now adapting these ideas to the kirana context.
Connectivity is no longer limited to flashy apps. Kirana shop owners can now use voice-led catalogues or vernacular chatbots to reach customers via simple phones, often through platforms like JioMart. Integration happens behind the counter — kirana stores serve as nodes in larger e-commerce networks, receiving same-day deliveries from suppliers and enabling customers to pick up online orders locally, much like Amazon’s “I Have Space” model.
Consistency emerges through unified payment systems and loyalty programmes. A customer who pays using a QR code in-store receives the same benefits as one ordering through an app — as seen in Tata Neu’s cross-platform strategy linking in-store experiences at Croma with online transactions. Flexibility comes from fulfilment models that allow customers to split orders between local inventory and warehouse deliveries. This hybrid strategy is common among B2B wholesalers such as Flipkart Wholesale, which supports kiranas with tailored logistics.
Finally, personalisation is no longer the preserve of large retailers with data science teams. AI is being applied to design micro-assortments customised by postal codes, guiding kirana owners on what items to stock based on local consumption patterns — a model that Reliance’s Smart Kirana initiative is now trialling. In effect, a consumer can begin with a Google search, message the shop via WhatsApp, walk over to pick up the item, and pay using UPI — transitioning across digital and physical environments almost without noticing.
Building the kirana store friendly AI stack
Even sophisticated technologies like artificial intelligence can benefit small retailers — provided the tools are modular, intuitive, and built for local constraints. Finland’s Kesko, a large retail chain, improved profitability by tailoring product assortments and promotions at the store level using AI. But its success hinged on making those insights available through simple mobile interfaces that frontline managers could use without special training (McKinsey & Company, 2025).
A similarly frugal and context-aware “Kesko-lite” stack could work in India. It would include image-based stock recognition using a basic ₹6,000 smartphone, allowing store owners to catalogue products with a few photos. Cloud-based prompts could nudge store owners to stock seasonal items ahead of festivals, boosting sales. Lightweight credit scoring algorithms could assess customer repayments and transaction history to predict whether a shop can safely be extended trade credit.
The early results from such AI-led interventions are promising. Several pilots report significant reductions in stockouts — a direct gain for kirana profitability, where margins are thin and lost sales matter.
Getting the policy settings right
A transformation of this scale will require supportive policies and targeted investment. The Open Network for Digital Commerce (ONDC) is a crucial initiative that mirrors the success of UPI in digital payments. By enabling kiranas to participate in e-commerce without being locked into proprietary platforms, ONDC could level the playing field and encourage market-wide interoperability.
Incentives for adopting affordable technology — such as GST rebates or accelerated depreciation for tools like barcode scanners or solar-powered POS devices — would further lower the entry barrier. Technology, after all, need not be expensive to be effective.
Digital skilling must also keep pace. The 2024 Technology-to-Performance (TPC) study emphasised that adoption depends largely on user confidence. Training models should focus on vernacular content and real-world tasks — for instance, “earn-while-you-learn” WhatsApp modules that guide shopkeepers through the use of new apps in small, manageable steps.
Finally, interoperability mandates could ensure that kirana stores are not locked into one provider for payments, loyalty, or inventory management. Standardised formats — for invoices, stock data, and customer records — would allow retailers to switch service providers with the same ease that telecom customers port mobile numbers. This would foster competition and prevent monopolistic behaviour in the retail-tech ecosystem.
The modernisation of kirana stores will not be a linear leap from dusty ledgers to high-tech solutions. It will proceed in layers, through incremental adaptation rather than abrupt overhaul. The common thread running through successful examples — from Indonesia to India to Finland — is that technology succeeds only when it bends to fit local needs.
India’s kirana stores represent more than economic units. They are social institutions embedded in community life. The challenge is to equip them for the future without severing their roots. If policy, design, and investment decisions respect this delicate balance, India could create not just a digital retail network, but the world’s most inclusive phygital ecosystem — one where the kirana and the smartphone reinforce each other rather than compete.
Dr Smitu Malhotra is Associate Professor, XLRI Jamshedpur. Abhishek Sur is an XLRI alumnus and a researcher.