Retailer Association highlights need for stronger support to small retailers amid rising e-comm

The Federation of Retailer Associations of India (FRAI) has appealed to the Union government, highlighting the urgent need for stronger support for small retailers as they face an existential crisis due to the rising threat of e-commerce and quick commerce platforms.

“The rapid rise of e-commerce and quick-commerce platforms in India is causing a steep decline in income and livelihoods for thousands of local grocery and kirana shop owners,” according to an association statement.

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FRAI raised its demands at an event organised on the occasion of the 9th National Retailers Day in New Delhi.

According to market studies, at least two lakh Kirana stores had closed last year as consumers had shifted to quick commerce platforms such as Blinkit and Zepto, FRAI said.

Further, a December 2024 study by JP Morgan on offline grocery stores in Mumbai showed that 60 per cent of them have seen a decline in their sales volume due to the mushrooming of dark stores of quick commerce platforms, it added.

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 on an uneven playing field.

As a result, many kirana stores are witnessing dramatic reductions in footfall and sales.

“Compounding the problem is the manner in which large, often foreign-funded e-commerce and quick-commerce companies 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.”

This shift discourages and diminishes entrepreneurship, converting once-independent proprietors into gig-economy workers with uncertain incomes and limited protections.

Given this grim trajectory, there is an urgent need for a fair, well-designed support model that protects the interests of small retailers and local entrepreneurs.

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, it said.

The retailers in the event urged the government to equip local Kirana stores with a dedicated technology platform that would enable them to compete fairly with quick-commerce companies and operate on equal footing.

FRAI further highlighted that a powerful step in empowering small retailers is through the government-backed ONDC (Open Network for Digital Commerce).