Kirana-B2B provider because orders increase 60%
Digbijay Mishra and Madhav Chanchani | TNN
Bangalore: India's business-to-business start-ups, such as WayCool and Ninjacart, which supply groceries and vegetables to tens of thousands of kiranas, are seeing a 40-60% increase in demand. The development comes as the 12 million kiranas in India's neighborhoods have proven more reliable for the essentials, as online grocery players and even supermarkets have struggled to meet growing demand due to problems ranging from labor shortages to bottlenecks.
But these companies said that only 30-50% of the kiranas in their network are operating right now, which is leading to a further increase in business for those who remain open. While the frequency of orders we receive from kiranas has remained the same, the ticket size is 2-3 times larger than normal now, said Ashish Jhina, founder of Jumbotail, which supplies food to 24,000 stores in Bengaluru. He added that many kiranas said that their traditional distributors are not showing up. These stores are located next to the house, and since they are a small family business, their ability to deal with shocks is much better.
WayCool Foods, which supplies 10,000 kiranas in South India, has seen a 40-60% increase in staple foods and a 20-30% increase in demand for fresh vegetables. Kiranas, which used to order once every two weeks, are now asking for replenishment every week given the increase in business. “The demand for these stores is generally determined by the cash flows they have. Some stores that are open can shop more frequently, said Karthik Jayaraman, co-founder of WayCool.
Some of these startups are also presenting innovative solutions. Udaan has piloted an app where gated communities can place bulk orders for a predetermined essentials package, while Jumbotail has received requests to open its J24 stores within residential complexes.
But even as demand increases, according to Sujeet Kumar of Udaan, the ability to meet the growing burden remains difficult as labor problems persist. Udaan continues to operate at only 50-60% of its capacity. Udaan, valued at $ 2.8 billion and supplying products to 3 million small merchants, said another problem is changing the definition of essentials. These companies, which also work directly with farmers, also see other problems. Ninjacart CEO Thirukumaran Nagarajan added that farmers are delaying planting new crops while waiting for a clearer picture of movement restrictions to emerge after April 14. “The supply chain problems are almost solved. But 40-50% of the kirana stores are not operating. On the consumption side too, there is a general drop as many have moved from the cities, said Nagarajan. The startup, backed by Flipkart and Tiger Global, is operating at 70-90% of its average daily capacity, serving 10,000-12,000 customers or small stores.