Small and medium retailers, facing heat from intense competition from e-commerce and quick-commerce platforms, through their association FRAI, have urged the government to create a dedicated technology platform, which will help them to compete with hyperlocal delivery platforms on an equal footing.
The Federation of Retailer Association of India (FRAI) has sought 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.
The rapid growth of e-commerce and hyperlocal delivery platforms, such as Blinkit and Zepto, have caused a decline in income and livelihoods for thousands of local grocery and kirana shop owners, the FRAI said.
At least two lakh kirana stores closed last year as consumers shifted to quick commerce platforms, FRAI said, while citing a market study. Moreover, in cities like Mumbai, a whopping number of 60 per cent offline grocery stores (kirana stores) witnessed a decline in sales volume due to the mushrooming of dark stores of quick commerce platforms, as per a December 2024 study by JP Morgan.
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. “As a result, many kirana stores are witnessing dramatic reductions in footfall and sales,” FRAI, which claims to represent 80 lakh micro, small and medium retailers from across the country with a membership of 42 retail associations, said a statement.
The association further said these hyperdelivery platforms, most of which are foreign-funded, engage with the small-retailer ecosystem.
Instead of empowering shop owners to grow their independent businesses, many of these platforms are turning them into delivery personnel or last-mile service agents, it said.
“Without intervention, the backbone of India’s informal retail economy risks collapsing — along with the livelihoods of millions of small-scale shop owners who have long served as the heart of community commerce,” FRAI said on the occasion of the 9th National Retailers Day here.
They also recognised the growing demand for faster delivery, greater convenience, and competitive pricing, and affirmed their readiness to embrace digital tools and enhance efficiency.
However, they also emphasised that without proactive government intervention to balance the competitive landscape, small retailers will continue to struggle against the vast financial and technological advantages of large e-commerce platforms.
Creating a Bharat Taxi-like digital system 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. Bharat Taxi is India’s new cooperative ride-hailing platform, launched with a zero-commission mode. This is the world's first national mobility service fully owned and run by drivers, and is designed to provide an alternative to private companies like Ola and Uber. FRAI Spokesperson Abhay Raj Mishra said, “We believe the government must urgently step in to create a fair competitive environment and empower local retailers with the right technology. Platforms like ONDC show immense promise in restoring balance by giving small businesses greater visibility, digital access, and a level-playing field.”
