Kiranas Lose FMCG Market Share as Modern Trade and E-Commerce Expand
India’s traditional kirana stores are experiencing a decline in their share of the fast-moving consumer goods (FMCG) market, as modern trade and e-commerce continue to gain traction. While kiranas remain an essential part of India’s retail ecosystem, their dominance is gradually being challenged by organized retail formats.
Modern Trade and E-Commerce Gain Ground
Modern trade outlets, including supermarkets and hypermarkets, have expanded their footprint across urban and semi-urban centers, offering consumers wider product selections, competitive pricing, and an enhanced shopping experience. These stores benefit from strategic location choices, efficient supply chains, and promotional offers that attract a growing base of value-conscious shoppers.
Meanwhile, e-commerce platforms have leveraged convenience, discounts, and rapid delivery services to capture a significant share of FMCG sales. The penetration of quick commerce services has further reinforced this trend, particularly in metro cities where consumers prioritize convenience. Digital payment options and subscription-based shopping models have also contributed to increased adoption.
Kiranas Adapt to Changing Consumer Preferences
Despite the shift, kiranas remain a vital part of India’s FMCG distribution network, catering particularly to last-mile delivery and personal relationships with shoppers. To stay competitive, many kirana store owners are embracing digitalization by partnering with B2B suppliers, integrating online ordering systems, and participating in loyalty programs offered by brands.
Large FMCG brands are also working closely with traditional traders by providing inventory management support, digital payment solutions, and promotional incentives to sustain their presence in the sector. However, the level of digitization and adaptation varies significantly across regions.
Outlook for FMCG Retail Channels
While kiranas still hold a significant share of FMCG distribution, modern trade and e-commerce will likely continue growing as consumers seek a mix of value, convenience, and assortment. The future of India’s retail landscape will depend on how effectively traditional retailers integrate with digital ecosystems and upgrade their operational efficiencies.
For FMCG companies, optimizing distribution strategies across all retail channels remains crucial. Balancing traditional trade with the expanding opportunities in modern trade and e-commerce will be key to ensuring long-term market reach and profitability.