Starting Your Very Own Kirana Store
Even with the rise of delivery startups, Kirana stores in India remain a profitable business with huge revenue potential. Learn more about starting one in this blog.
indiagold team
29 Jun 2022
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Known to the world as convenience stores, Kirana stores are shops that fulfil Indians’ basic grocery and daily needs by stocking a variety of products. According to 2021 statistics, India has more than 12.8 million Kirana stores spread across all cities and villages.


With customer bases mostly restricted to a few blocks or streets, these little corner stores have often been deemed to be a trend of the past. This is due to the surge in popularity of e-commerce players, with giants like Amazon, Walmart and Reliance joining in to take slices of the supermarket pie. This begs the question: is starting a Kirana store in India still viable?


The answer is a resounding yes!


India’s FMCG market was valued at a whopping USD 110 Bn in 2020, with approximately 90% of FMCG sales recorded through Kirana stores. The sector also accounts for 10% of India’s GDP, and contributes a significant 8% to total employment in the country. And with India’s FMCG market projected to double by 2025, this segment will certainly continue to have huge potential in the coming years.


Most Kirana store owners build and share a strong rapport with their customers, and in doing so enjoy a loyal customer base. Practices such as taking orders via call are quite common.


Now the big question is: how to start a Kirana store?


Why invest in a Kirana store?

Kirana shops are an excellent investment if your goal is a steady, moderate revenue stream. Even billionaire businessmen like Jeff Bezos and Mukesh Ambani have realised their potential, and are trying to leverage India's Kirana store network to grow their e-commerce grocery business.


Amazon recently onboarded thousands of Kirana stores onto their online platform. JioMart, Ambani's online grocery venture, is working to connect these small shops as their franchise partners. When starting a Kirana store, remember to come up with a detailed Kirana store business plan to ensure smooth operations.


A few factors that make operating and starting a Kirana store a worthy prospect:

  • Often called “pados ki dukan” (neighbourhood shops), they are considered highly convenient by most Indians, whether for buying monthly rations or emergency supplies.
  • Many consumers prefer Kirana stores, as they can pop by and purchase goods without having to wait for delivery. Moreover, many customers place orders directly with the store via a phone call.
  • Since Kirana store owners frequently interact with customers, they develop a good understanding of consumer needs. Thus, they are able to maintain a ready inventory of goods according to the preference of local customers. Such adaptability is not always possible for large e-commerce chains.
  • Since starting a Kirana store doesn’t require maintaining a large inventory of goods, it also doesn’t require a large investment.
  • Most products offered by Kirana stores are fast-selling. Thus, these stores have higher liquidity, decent cash flow, and quick profits.

Which Products to sell at your Kirana Store?


In order to build a profitable retail business, it is essential to identify the community's needs. Choosing the right array of products to sell at your Kirana store is significant in this regard.


Different areas have different product demands. For example: if your Kirana store is in an area with many school-going students, you should stock up on stationery, snacks, candies, etc. Additionally, remember that your most frequent customers will be locals living within 1-2 kms from your store. We recommend carrying out a simple survey to identify consumer age group, gender, etc., and learn their preferred brands for important items like oils, pulses, rice, personal care and bathroom products, biscuits, chips, etc. The most commonly sold items at a Kirana store are household products, toiletries, beverages, packaged food, and cosmetics.


Points to remember while starting a Kirana Store

  • While starting out, use marketing techniques such as discounts, offering newly launched products free of cost, and memberships for long-term clients. These will give you an edge over competitors.
  • With everything available online, many people find grocery shopping to be an avoidable hassle nowadays. Thus, hiring a few people and offering home delivery will make things convenient for your customers.
  • Diversifying your range of products can also attract a larger customer base. For this, ask consumers for feedback about their needs. This will also make patrons feel happy and comfortable visiting a homely store.
  • Nowadays, many Kirana store owners are adopting best practices of modern retail. You should do this too! Try to upgrade cash registers with online accounting, sell online using social media/websites, make a customer feedback database, etc.

Procedure to start a Kirana Store

Opening a Kirana Store is pretty simple if done properly and systematically. Just follow these simple steps, and you’ll soon be on your way to start your own store:


Make a business strategy:

No company can thrive without a well-formulated business plan. It is important to recognise the financial circumstances of targeted clients and price goods accordingly.


In order to make a Kirana store business plan, begin by researching prospective buyers' needs and preferences. With a systematic analysis, you can figure out the way ahead. Additionally, you’ll have to make a list of how many staff you’ll need to manage various aspects of the business.


Choose a location:

To start a Kirana store, you must choose a suitable location - ideally one that is easily accessible with appropriate security. You should seek a location that has good accessibility, and doesn’t already have an established retail store. This will help you avoid direct competition as you start out.


Be financially prepared:

Remember that Kirana stores bring with them expenses such as commodities, labour, suppliers and maintenance. Factors including rent, inventory and logistics also form a part of financial investment. The amount will vary depending on whether you want to operate a small independent store or purchase a franchise.


Keep inventory ready:

It is important to decide the goods and brands you wish to offer and how much inventory you want to keep. Kirana store owners can use a distributor or purchase straight from wholesalers, whatever they consider more feasible.


It is also easy to keep track of inventory using online company accounting software. This makes integrating digital receipts and payments much easier than manual methods.


Complete licensing and registration requirements:

After determining the size and scope of your business, it’s time for paperwork! The registrations required for a Kirana store are: Registration of Shops and Establishments, Food Licence, Entity Registration and GST (optional).


Know your competitors:

By visiting nearby department stores and supermarkets, you can get a sense of their operation and management styles. Note their layouts, see what techniques they use to drum up business, and keep thinking of new ideas along the way.


Going the extra mile:

Brainstorm ways to build your business’ reputation, and place it over those of competitors. Some ways might include: building a visually appealing shop, offering home delivery, as well as selling high-quality products and some luxury brands. It’s a smart idea to publicise your business using all available methods to get the word out about a new convenience store in the neighbourhood. To retain customers and attract new ones, you can come up with some appealing programmes, offers, and discount policies. The end goal is to satisfy your customers, and have them come back regularly in order to build long-term relations.


Conclusion

From what we’ve learned, starting a Kirana store can be a simple yet lucrative business choice. And if you’re looking for a short or long-term loan to start your Kirana store, consider trying a gold loan from indiagold. With your ornaments insured and stored safely, cash given in hand within minutes, and hassle-free repayment options – it’s almost a no-brainer!

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