Kirana stores have long been the backbone of India's retail sector, serving as the primary source of daily essentials for millions. As the retail landscape evolves, these small stores face significant challenges, from competition with organized retail chains to maintaining efficient inventory and supply chains. Enter Flipkart Wholesale, Frendy, and Vilcart—three innovative companies revolutionizing the Kirana store landscape by bringing modern retail practices and technology to smaller towns and villages

A Powerhouse in B2B Retail

Flipkart Wholesale, an integral part of the Flipkart Group, has emerged as a leader in India's B2B sector by integrating Walmart's B2B model with Flipkart's innovative retail strategies. "We have a truly omnichannel approach, with 26 stores across the country, a robust out-store business, and an ever-growing online presence," says Dinkar Ayilavarapu, Head of Flipkart Wholesale. The company's unique model seamlessly integrates physical stores, a field force, and online platforms into a single inventory system, ensuring a wide range of products are consistently available across all channels.

This omnichannel strategy is a game-changer for Kirana stores, which often struggle to stock the necessary items to compete with organized retail chains. Flipkart Wholesale offers an unmatched variety, enabling these small businesses to thrive. "Our omnichannel strategy allows us to serve the full breadth of our customers' requirements, whether they visit our stores, receive doorstep service, or order online. They benefit from our extensive inventory and efficient distribution," Ayilavarapu explains.

Modernizing Micro Kiranas

Frendy's mission is to enhance the daily shopping experience for consumers in Tier II and Tier III cities through its network of franchised grocery Mini Marts and micro Kiranas. "The founding team of Frendy had previously worked together at an affordable housing business targeted at customers from Tier II/III towns. We saw that consumers in these smaller towns were becoming increasingly aspirational," says Sameer Gandotra, Founder CEO of Frendy. "We understood that if aspiration exists for housing, it will for groceries and daily essentials as well."

Connecting Farmers to Consumers

Vilcart, a Bengaluru-based startup, is revolutionizing rural commerce by providing quality products at affordable prices directly to rural Kirana stores. Established in 2018, Vilcart addresses the lack of a direct supply chain connecting agricultural producers to consumers. "Approximately 70 percent of India's population resides in rural areas, yet these regions are largely underrepresented in city-centric supply chains. To address this, we developed an end-to-end supply chain that directly connects farmers as producers with farmers as consumers," explains Prasanna Kumar, Rural CEO of Vilcart.

The Phygital Model

Frendy's innovative phygital model combines physical stores with digital solutions to meet the unique needs of rural consumers. This model allows customers to browse and order products via a digital app or through a micro Kirana partner, ensuring the trust and convenience of a local store. "Our mission is to make daily shopping better. Our offline Frendy Marts bring value through deals and offers, a wider assortment, and a safe, clean environment," explains Gandotra.

Vilcart leverages technology to streamline operations and enhance the shopping experience for rural consumers. Their user-friendly app and telesales facility allow customers to place orders conveniently, while data analysis provides insights and recommendations to optimize inventory management for Kirana store owners. "Our app fits well with the special needs of rural India. By prioritizing our relationship with rural Kirana stores, we effectively extend our care to a significant segment of rural households," Kumar emphasizes.

Frendy uses technology to streamline operations and enhance customer experience. Their in-house Auto Replenishment System ensures that shelves are always stocked, while WhatsApp marketing keeps customers informed of daily deals. Additionally, a digital loyalty program gamifies shopping, increasing customer engagement. "We focus on serving 90 percent of the needs of 90 percent of our customers. This means we don't have too many SKUs physically at our Marts or micro Kiranas, which simplifies inventory management," notes Gandotra.

Bridging the Knowledge Gap

Educating small retailers is no easy feat, but Flipkart Wholesale has a multifaceted approach. “The store is a place where the owner is constantly hassled—by customers wanting the best deals and by salespeople pushing products. However, the only time they are treated like a customer, with no hassle, is when they are in our stores,” Ayilavarapu explains. By providing a relaxed shopping environment and regular visits from sales staff, Flipkart Wholesale educates Kirana owners on new products and promotions, helping them stay competitive.

Geographical Reach and Expansion

With 26 stores strategically located across India, Flipkart Wholesale covers approximately 3,000 pin codes, reaching about 15 percent of the country. Each store serves a 150-kilometer radius, ensuring extensive coverage and frequent service. "Our footprint in underserved markets is particularly strong," Ayilavarapu highlights. Plans are underway to launch a recommendation product, providing Kirana stores with personalized advice on stocking and business strategies based on comprehensive data analysis.

Micro Kiranas often face challenges such as poorly stocked inventory and high prices due to their reliance on wholesale markets. Vilcart’s inventory-based model, supported by 93 warehouses across Karnataka, Andhra Pradesh, Telangana, and Tamil Nadu, ensures a consistent supply of goods to rural Kirana stores at competitive prices. "We provide doorstep delivery to rural Kirana stores twice a week, ensuring a consistent supply of goods. Our prices, inclusive of incidental costs and transportation, are more competitive than procuring products from urban centers," Kumar adds.

Funding and Expansion

In January 2023, Vilcart secured $18 million in a Series A funding round, positioning the company for ambitious expansion across South India. Similarly, Frendy's measured growth approach and focus on optimizing costs have positioned them for scalable expansion. "We believe that our neighborhood mini Mart format, digitally connected to micro Kiranas, will allow us to serve the largest number of households with our phygital model with the least capex," Gandotra states.

A Shared Vision for the Future

Both Frendy and Vilcart share a common goal: to modernize rural retail and improve the daily lives of rural consumers. Their efforts are not just about bringing products to rural areas but about creating a sustainable ecosystem that empowers local retailers and enhances the shopping experience.

As incomes rise and aspirations grow in rural India, the demand for a better shopping experience will continue to increase. Both Frendy and Vilcart are well-positioned to lead this transformation, leveraging technology and innovative business models to bring modern retail to the heart of rural communities. "We believe that overall in India, this customer segment will grow to become a $500 billion grocery market," Gandotra predicts. "Frendy Mart seeks to make daily shopping better for these consumers, both in dense urban towns and digitally via micro Kiranas in the rural catchment areas surrounding such towns."

Vilcart’s Kumar echoes this optimism, "Our platform serves as a one-stop solution, catering to the diverse needs of rural India and bringing the luxury of grocery shopping right to their doorsteps. By transforming rural Kirana stores into grameen supermarkets, we are revolutionizing the rural shopping experience."