Kirana Transformation in India

KIRANA
TRANSFORMATION
ININDIA
Measuring the impact of kirana transformation
An approach to promote retail sector
modernization in India
April 2020

Changing Retail Landscape
Research
a. Methodology
b. Findings
c. Benefits of Transformation
Transformation Process
Challenges
Role of Stakeholders
Recommendations
Appendix
Contents
Importance of Traditional Trade in India1
2
4
5
6
7
8
2
3

3
IMPORTANCE OFTRADITIONAL
TRADE IN INDIA

Retail industry accounts for almost 11% of the country’s GDP and employs more than 8% of the workforce
– but 88% of the sector is unorganized (and informal).
US$2.72
TRN
2018
India GDP ($TN), and contribution by sectors
18%
11%
Agriculture
Retail
Others
Copyright © 2020 Accenture. All rights reserved.Source: World Economic Forum – Future of Consumption in Fast-Growth Consumer Markets: INDIA, 2019; IBEF Retail, 2019;
Centre for Sustainable Employment, Azim Premji University, 2019
4
Indian retail has emerged as one of the largest sectors
in the economy
Total employment = 465.1 M
Non-farm employment = 259.7 M
Services employment = 144.4 M
Retail & wholesale employment = 43.3 M
Total workforce = 495.1 M
43.3 M
Retail is a big
driver of jobs in
services,
accounting for
in 2017-18
65%
…and Food and
Grocery accounts
for more than
of retail industry
87654321 Importance of Traditional Trade in India

Copyright © 2020 Accenture. All rights reserved.Source: World Economic Forum – Future of Consumption in Fast-Growth Consumer Markets: INDIA, 2019; IBEF Retail, 2019 5
By 2030, more than 60% consumer spending will be driven
by high-income and upper-middle classes segments
Evolution of household income profiles in India
Low-income
households
Lower mid-income
households
Upper mid-income
households
High-income households
2018 2030F*
61 M (21%) 168 M (44%)
97 M (33%) 132 M (34%)
127 M (43%) 57 M (15%)
8 M (3%) 29 M (7%)
The addition of 128 M households into
the high-income and upper middle
classes in the next 10 years will drive
almost US$3 TRN of consumption.
Growth in income will transform India from a lower income-led
economy to one led by the middle-class.
Modern retail formats will be required to cater to the needs of
this population.
87654321 Importance of Traditional Trade in India
*F is for Forecasted number

Copyright © 2020 Accenture. All rights reserved.Source: Accenture Analysis 7
Indian consumer preferences are changing and this
‘new’ consumer prefers modern formats
Burgeoning Millennial Population and
Changing Outlook on Spending
Digital Disruption
Growing GDP per capita,
Expenditure and Wallet Share
Increasing Women in the Workforce
Growth of markets
• World’s #1 millennial population
• Not guilty about spending on themselves
• Believe in investing in fulfilling their needs more thoroughly
• The new evolved consumer expects a seamless shopping experience across
every channel be it store, online or mobile
• India's GDP per capita grew over 5 years to 2X of global per capita to reach
US$7,742 in 2018
• Consumer expenditure has grown by 60% to reach US$1.2 trillion during
2015-2020 period
• More aspirational consumer open to buying new categories of goods and new brands
• Number of women in the workforce will rise 40% to touch 10 million in the next
five years
• More earning members and family income will mean more discretionary spending
• Online players have created brand awareness in the smallest of towns
• Earlier, malls were confined to top-tier cities only. Now, they are growing in
tier II and III cities such as Lucknow, Kanpur, Panaji, Jaipur and Udaipur
Modern
retailers can
now look at
500+
cities as their
market
87654321 Changing Retail Landscape

The advent of new business models was spurred by three major developments in 2016-17 – launch of 4G
services led by Reliance Jio, the introduction of GST, and demonetization – all of which has affected the
informal and unorganized economy.
B2B Ecommerce thrived
Providing payment solutions to retailers
B2C Ecommerce became popular
Partnering with the kiranas for business growth
Turned profitable
in 2016
Became Unicorn within
2 years of operation
Changes
occurred
in 2016-17
Indian retail is witnessing unprecedented disruption
GST
%
4G

70.00%
80.00%
90.00%
100.00%
2003 2008 2013 2018
Traditional stores as a percentage of total stores by country
India
Indonesia
Philippines
Thailand
China
Malaysia
South Korea
With modern retail growing over the years, traditional retail in developing as well as developed countries has witnessed a decline
in store volume as well as market share.
• In the United States, rapid expansion of major modern retailers in the 1980s and 1990s was responsible for a 40%-50% decline
in the number of small discount stores.
In India, many traditional stores shut shops due to the growing modern retail formats and eCommerce.
* Note: This graph considers only store-based modern and traditional grocery retailer
formats (as per Euromonitor) and does not include mixed retailers, non-grocery retailers,
e-commerce and other non-store based sales.
Copyright © 2020 Accenture. All rights reserved.Source: Euromonitor 2019; Accenture Analysis 9
As traditional retail methods remain ‘old’, it has witnessed
decline similar to what happened in many developing countries
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
2003 2008 2013 2018
India
Indonesia
Philippines
Thailand
China
Malaysia
South Korea
Traditional store sales as a percentage of total retail sales by country *
* Note: Based on expert views / observation

In US, as per a study, for every two jobs large modern retailers
"created," three local jobs were destroyed and on average, within
15 months of the opening of a large modern retail store, as many as
14 existing retail establishments closed down.
US: Number of Grocery Stores by store format
Format 1980 1984
Grocery Stores 172,033 165,319
Conventional Stores 22,373 17,516
Superstore 2,343 4,904
Warehouse 1,369 3,449
Combination 237 943
In India, the numbers will be way higher as compared to US
due to high fragmentation
By 2022, more than 600 new modern stores will generate
about 60,000 new job opportunities in India. At the same time,
they will result in almost 300,000 job losses
(or 0.06% increase in unemployment) and closure of almost
90,000 small provision stores in the vicinity.*
* Refer employment model on next page
India retail staring at possible 300,000 job losses
in next 3 years

No. of Stores
2019 2022E
No. of new MT
stores in next 3
years
No. of Traditional
trade stores
closing for 1 new
MT store
Avg.
Employment
generated per
store
Loss of
employment
Modern Trade Stores 6,809 7,414 605 100 60,500
Provision Store - Large 200,000 202,000 (10) 15 (90,750)
Provision Store - Medium 2,000,000 2,020,000 (30) 4 (72,600)
Provision Store - Small 7,800,000 7,878,000 (100) 1.5 (90,750)
Paan beedi shops 2,500,000 2,650,000 1 -
Wholesale 40,000 40,000 (5) 5 (15,125)
12,546,809 12,797,414 (145) (208,725)
Employment Model

Though India falls in the third wave of retail modernization in developing
economies, retail revolution has barely got underway due to a
protectionist approach aimed at insulating local players and largely
against foreign investments.
To revolutionize retail sustainably, it is critical to assist local firms
(retailers and suppliers) to adapt to modern retailing so they can benefit
from productivity gains.
The next 10-12 years will be the defining years for Indian retail as –
Copyright © 2020 Accenture. All rights reserved.Source: Making retail modernization In developing countries inclusive, GIZ, Germany, 2016; Accenture Analysis 12
Most of the Indian retail sector has barely seen modernization
in last 20 years
1st Wave:
Early 1990s
2nd Wave:
Mid to late
1990s
3rd Wave:
Early
2000s
4th Wave:
Late 2000s
South
America, East
Asia (outside
China and
Japan), parts
of Southeast
Asia (e.g. the
Philippines
and
Thailand),
North-
Central
Europe and
South Africa
Mexico and
parts of
Central
America,
Indonesia,
South-
Central
Europe and
South Africa
China,
Eastern
Europe,
Russia, other
parts of
Central
America and
Southeast
Asia, and
India
South Asia
(outside India),
sub-Saharan
Africa, poorer
countries in
Southeast Asia
(e.g.
Cambodia),
Bolivia
Retail transformation waves in emerging markets
(spatial expansion outside North America and
Western Europe)
• The market will mature and organized retail will penetrate deeper into
smaller cities and towns
• More international brands and retailers across categories and formats
will aggressively enter and grow the Indian business, plus India will
become the key growth market for the ones already present
• Technology will shape the future path of consumption and new
markets or channels could emerge

2000
2005
2010
2015
2020
Early adopters of modern retailing such as Sarvodaya
Supermarket at Dadar West, Mumbai.
Message of modern retailing spread mainly through kirana
communities like Kutchi, Baniyas etc.
Transformation adopted by a few major kirana owners
(large provision) till 2015 +
New standalone supermarkets established by individuals.
After initiatives led by Kirana King, Walmart, Metro and
ShopX, more kirana stores are undertaking their own
transformation journeys.
What they lack is confidence & guidance
However now, many stores are adopting change
towards modernization
2000
2015
2020

DOES KIRANA
TRANSFORMATION WORK?
OUR RESEARCH FINDS OUT
15
* Note:
Kirana Transformation comprises of below 3 parameters of the store –
• Self-service format with check-out counters and shopping trollies / baskets in place
• Mode of accepting digital payments – cards and wallets
• Use of Technology for computerized billing, inventory management etc.
• Use of modern retail principles for store management e.g. buying and selling products
Copyright © 2020 Accenture. All rights reserved.
87654321 Research

We have conducted in-depth research across multiple
Indian markets to see what is the outlook of kirana owners
toward modernization
We conducted a qualitative interview and studied the
transformation impact data of 57 kirana store owners
who had completed transformation
18 16 23
Tier-1 cities Tier-2 cities Small towns
We covered tier I and tier II cities across India and small
towns (villages) in Maharashtra
10
22
7
5
3
5
121
1
Independent
Consultant
Methodology87654321 Research

Who are we addressing?
Store type Approx. numbers Properties
Standalone supermarket 10,000 Modernized and already classified in modern trade
Large provision stores 200,000
Has huge customer base of monthly shopping, typically 500–2000 sq. ft. stores
established 15 to 50 years ago, currently run by the second generation of the family
Medium provision stores 2-3 M Typically 200–500 sq. ft. store, sells mostly to customers of locality/housing
colonies, stocks most products in limited quantity
Small provision stores 7-8 M
Very limited customer base, typically very small setup with limited items and
buying from wholesale on a regular/daily basis and selling
Tapri / Paan beedi shops 2.5 M
Wholesale / Semi-wholesale 40,000 Typically located in wholesale/semi-wholesale clusters in the city
Methodology87654321 Research

0 1
17
14
25
Less than 0%
0% to 20%
20% to 50%
50% to 100%
More than 100%
Every store has benefited from transformation
Revenue
Profit
Tax Contribution
Employment
20% - 300%
30% - 400%
Median 50%
Median 50%
SKUs
Customers Median 20%
Median 50%
123%
76%
184%
135%
Tier-1 Tier-2 Town Grand Total
Average Sales Impact (% growth)
Note:
The sales impact shown is skewed
based on the level of guidance
received by the stores we covered,
and may not represent the actual
potential of the city/town
10
0%
100% retailers said business has
increased post-transformation
Percentage growth in sales
after transformation
Findings87654321 Research

Impact on product categories & inventory turnover
30
25
18
15
12
10
8
Product categories that have shown growth in sales after
transformation
Number of retailers
Findings indicate that customers want
options and they are ready to purchase
FMCG brands (due to better awareness)
Packaged Food – Snacks & Biscuits
Packaged Food – Branded Grocery
Packaged Food – Frozen Food & Soft Drinks
Personal Care
Home Care
Grocery
Packaged Food - Others
10
0
%
Retailers saw
increased sales of
large packs
80%
Retailers said
problems due to
expiry/damages
reduced drastically
95%
Retailers said
inventory days
reduced
• Typically provision stores have 500 to 2000 SKUs
• Not aware about the inventory days and products in
stock – which often result in expiry and damages
• Typically, retailers place orders of moving SKUs based
on their gut feeling and as per fortnightly visits of
companies' sales personnel, while non-moving SKUs
may have a year's stock in their inventory
• Focus product categories tend to be those which are
visible like grocery
• Issues of rodent infestation due to clutter
• Typically post-transformation supermarkets have
3000 to 7000 SKUs
• As all stock is on the shelf, less chance of expiry or
damages due to ignorance about items
• Typically, orders of all SKUs placed based on report
and sales generated, resulting in inventory of
moving SKUs around 7 to 21 days; for non moving
SKUs, it may be 2-3 months
• Growth seen mainly in packaged food, personal
care and home care categories (FMCG brands)
• Managing stores easier due to neat and clean setup
Before After

Impact on retailers’ competitiveness in the market
95%
Retailers feel younger
generation prefers
supermarkets
76%
Retailers saw
increased number of
customers
67%
Retailers saw
increase in number
of staff
90%
Retailers feel they
have much more
time now
9
5
8
15
FMCG companies can give more schemes/benefits to
retailers classified as Modern Trade
25
12
Retailers have installed digital
payments system (POS)
Majority of retailers
we visited said
30%-50%
sales are now through
credit card / digital
payments
Findings
FMCG companies have informed, but not yet
Classified into MT
Will not consider MT because of min. size
requirement 2000 sq. ft.
Will not consider MT because of rural area
FMCG companies have already classified into MT
87654321 Research
12 had installed before
transformation process
25 have installed along with
transformation process

Factors contributing to transformation impact Impact on revenue Typical reasons
• Only change of shelfs and store-layout enabling self-
service for the customers
20% to 30%
Increased visibility of all products, impulse
purchases and sale of large packs
• Large-scale renovation of the store with additional
space, floors etc.
20% to 50%
Attracting upper-middle class customers (if
present in the locality) and sale of premium
products, attracting monthly shoppers from large
modern retail chains like Big Bazaar and Easyday
• Store location in high footfall area such as near
railway station, market
30% to 50%
Increased walk-in customer base, attracting
customers living in nearby areas
• Store location being in highly untapped potential
markets such as outskirts of cities, suburban markets
or rural area
20% to 30% Availability of SKUs (aspirational)
• Know-how/Use of data and technology/expert
guidance received in the field
50% to 100% Educated decision making
• Store owner DNA and involvement 30% to 50% Ownership
Typically, the impact from transformation depends
on a few factors
2. Potential of
the locality
3. Know-how
and owner’s
DNA
1. Level of
transformation
completed
Sales growth of 200%-300% can be achieved; while on lower side, sales growth of 20%-50% can be seen

Copyright © 2020 Accenture. All rights reserved. 22
Six personas of the kirana store
Harvey balls signify the level of 3 factors that create these personas * Please refer appendix for more detail on personas
We segmented kiranas into six personas based on the factors driving transformation impact.
S.G. Provision, Lucknow
Owner under 40 years of age, usually self-
owned, computer-savvy, educated, ambitions
to grow the business, catchment area of up-
trading shoppers
Store owned by 2 generations of a family, have
loyal customers. Continuing with “old
fashioned” list format, while applying modern
retail techniques to improve basket
Approximately 120 sq. ft small store in a small
residential area, store owner not keen on
growth; serving impulse, daily needs only
Milan Super Shoppe, Mumbai Auntyji Store, Ghaziabad
Shree Ambika Supermarket, Mumbai
Limited store area of approximately 400 sq. ft,
keen on growth & transformation, strong
aspirational catchment area of middle/low
middle class neighborhood
Stores owned by 2-3 generations of a family
transforming into new, chain format. Making
forays into serving newer types of
neighborhoods, driven by the new generation
New kirana store, started by owner in age
group 30-40 years due to lack of job
opportunities or existing business not
doing well
Kirana Ghar, Mumbai Sastaa Bazaar, Lucknow

Based on these factors, we can segment kirana store
transformations into six personas
* Please refer appendix for more detail on personas
Impact: 2-4X sales growth in 3-6 months Impact: 1.5-2X sales growth in 3-6 months
Impact: 2-3X sales growth in
3-6 months
Impact: 2-4X sales growth in 3-6 months
driven by new store
Impact: 1.2-1.5X sales growth in
3-6 months
Findings
Impact: 1.2-1.3X sales growth in 3-6 months
87654321 Research
Owner under 40 years of age, usually self-owned,
computer-savvy, educated, ambitions to grow the
business, catchment area of up-trading shoppers
Store owned by 2 generations of a family, have loyal
customers. Continuing with “old fashioned” list
format, while applying modern retail techniques to
improve basket
Approximately 120 sq. ft small store in a small
residential area, store owner not keen on growth;
serving impulse, daily needs only
Limited store area of approximately 400 sq. ft,
keen on growth & transformation, strong
aspirational catchment area of middle/low middle-
class neighborhood
Stores owned by 2-3 generations of a family
transforming into new, chain format. Making forays
into serving newer types of neighborhoods, driven by
the new generation
New kirana store, started by owner in age group 30-40
years due to lack of job opportunities or existing
business not doing well
S.G. Provision, Lucknow Milan Super Shoppe, Mumbai Auntyji Store, Ghaziabad
Shree Ambika Supermarket, Mumbai Kirana Ghar, Mumbai Sastaa Bazaar, Lucknow

Major reasons for undertaking transformation
Source: Accenture Analysis
32
30
27
25
23
18
Store revamp
Approached by expert guidance/
consultant/Walmart/Metro
Store operations became difficult
to handle
Aware about the trend/customer
feedback to transform
Next generation initiative
Declining sales
Reasons why retailers have decided to modernize
Metro Store, Bengaluru
Before After
Garg Provision Store, Ghaziabad Nishank Store, Lucknow
Sales were declining Managing store operations was becoming difficult

Kirana transformation can also boost the rural consumption
18 stores we spoke to, were present in small towns with population less than 1 lakh and the store owners are also
interested in participating in the formal economy.
• Even customers in small towns are
aware about most of the brands (due to
Internet and TV ads) and they want to
buy them, but due to lack of supply,
they need to go to nearby cities.
• In many places, customers go to nearby
large towns/districts/tehsil-level towns
to buy their grocery.
• Retailers are aware about the untapped
consumption potential which small
towns have.
• Impact of modernization is on the
higher side in such areas.
Case Study – Saptashrungi Super Shoppee, Nandgaon, Maharashtra
In this small town with less than 50,000 population, people used to go nearby cities like Malegaon
and Nashik for their monthly grocery purchases and for a “mall experience.” The owner of this
store saw a huge opportunity and transformed his store into a modern one. His stores sales have
doubled today.

Benefits to store owner
Financial Growth
Bangaluru
SLV Mart witnessed 100%
growth post-
transformation.
Also, the owner now has
more cash in hand since
he does not need to
provide credit facility to
his loyal customers now.
Hyderabad
The 35 year old owner of
Ganesh Stores is very happy
that he can tell the people
of his village in Rajasthan
that he runs a modern retail
store today. And that he is a
“self-made” entrepreneur
after he lost his parents at a
young age.
Mumbai
The owner of Bhayandar
Soap Center had very
little visibility into
inventory prior to
transformation post-
transformation, he is
better able to manage
inventory in his small
400 sq ft store.
Empowered to Compete in the Era of
Retail Disruption
Lucknow
Sasta Bazaar is
successfully competing
with Easyday and Big
Bazaar in a very saturated
middle and low-middle
income neighborhood.
Better Customer Engagement
Mumbai
Many transformed kirana
stores have reported that
displaying store offers and
product launches on
screens and shelfs have
increased customer
engagement and improved
sales by as much as 10%.
Sustainable Income & Employment
Lucknow
A to Z Daily Needs opened
when the owner could not
find employment.
Today, it is driving
consumer development in
the locality. This, in turn,
has resulted in sustained
income and employment of
three additional people.
Most importantly, conversion to self-serve format frees up owner’s time
Benefits of Transformation
Pride & Next-Gen Engagement Better Store Operations
87654321 Research

Benefits to consumer
MRP & billing transparency
Passing of offers by FMCG companies
Easier customer returns
Better quality products (no expired
stock, no problem of rodents)
Consumer Right benefits
Customer base: Core customer base
is daily wagers who buy on a weekly
basis, unlike the typical Indian
grocery shopper who buys monthly
Locality commentary: Number of
households is more or less saturated
in the neighborhood. However,
incomes are growing. Low-income
and low-middle shoppers primarily.
Impact: Consumers are clearly
seeing the benefits of greater
transparency.
Before After
Case Study: MB Mart, Kurar Village, Mumbai
Consumer Rights are Protected Improvement in Basket Assortment with Better Access, Choice,
and Convenience
Access to categories that were not available before
Case Study: Sanitary napkins sales at Shyam Traders
in Lucknow went up nearly 80% within 3 months.
Growth in the Customer’s Basket
Prior to transformation in the old store format, the customer’s basket primarily included
grains, pulses, oils and some items of packaged food. After transformation 100% of the
surveyed retailers mentioned growth in customer basket to all FMCG categories
(personal care, home care, snacks, biscuits, soft-drinks)
Up-trading
Case Study: After trial and offers, consumers at
Navjeevan Supershop in Jalgaon, Maharashtra,
up-traded from detergents and bars to dish
washing liquid.
Access to monthly groceries in the neighborhood
Easier access for consumers to their monthly needs within a 2 km
radius, which is usually the preferred radius for shopping groceries.
Case Study: Consumers in Lasalgaon did not have to travel 30 km to
Nashik after the local store became a modern retailer (For the retailer,
it meant a 100% growth in sales.)
Benefits of Transformation87654321 Research

Benefits to government
Increase in Local Employment Formal Economy Increase in Tax Contribution
• Transformation will promote both
self-employment and employment of
the local community.
• Our research found an average 50%
growth in employment post
modernization.
• Transformation of 1.4 M stores can
generate 3.2 M NEW JOBS
• Modernization of this industry can
provide jobs to low-skilled people
• Transformation of 1.4 M stores
can provide could translate
into a 250% growth in use of
computerized billing and
ledger system. Adoption of IT
systems will enable the
government to have better
visibility and traceability into
what was previously the
"informal" economy.
• Kirana transformation has led to an
average 50% growth in tax
contribution of retailers.
• Transformation of 1.4 M stores can
also boost income tax contribution
from retail businesses by 240%,
growth in income tax contribution
from retail businesses, resulting in
incremental income tax of
approximately INR16 billion.
Driving Rural Consumption
• Modernization will drive
consumption, including
in under-served semi-
urban and rural markets
where current demands
are unmet.
• It will also help improve
rural supply chain and
accessibility.
Positive Impact on
Consumption & GDP
Food Safety
& Hygiene
Boost for Domestic
Industries
• Modernization can provide a 5%
to 20%* boost in consumption,
which will positively impact GDP
• Our research found about 50%
store sales are now completed
through non-cash payments.
• Modernization will directly benefit
the Digital India campaign.
• Modernization will enable
evolution of local players and
supermarket chains across
different cities / towns, which
will naturally preserve local
small-scale businesses such as
food processing industries,
home-made cuisines, etc.
• Modernization will improve food
safety and hygiene standards
for the community.
Benefits of Transformation87654321 Research

30
SINCE ITWORKS, WHAT ARE THE STEPS
IN KIRANA TRANSFORMATION?
87654321 Transformation Process

31Copyright © 2020 Accenture. All rights reserved.
Blueprint of kirana transformation
Three key attributes of the modern store Broad investment required for a store size of 3000 sq. ft
• Self-service format with checkout counters and
shopping trollies/baskets in place.
• Mode of accepting digital payments–cards and wallets.
• Use of technology for computerized billing, inventory
management, etc.
• Use of modern retail principles for store management
e.g. buying and selling products.
Initial setup cost per sq. ft. Cost (Rs/sq. ft.)
Fixtures 250
Fixtures - Backoffice 30
Airconditioning 150
Equipment 10
Electricals 125
Chiller / Freezers 100
Security & Loss Prevention 30
IT Equipment 250
Investment in Stock 500
Cost of infrastructure: Approximately
INR1,500/sq. ft.
Cost of POS system
• Available with banks and payment companies
• Typically, cost ranges from 0.5% to 3% of
transaction amount
Cost of technology (software)
• Many software available in the market. For
example, RetailWhizz
• Typically ranges from INR25000 to
INR200,000, covering one-time cost and
AMC contract
Other fixed costs
• Signage INR100,000
• Mechanical weighing scale INR5,000
• Launch marketing costs
• One-month store operations cost
Stages of kirana transformation
Location
Assessment
Funding
Assessment
Store
Layout
Procurement
Of Technology
Product
Placement
Product
Assortment &
Pricing
Increased
Employment,
Better Engagement
1 2 3 5 6 74

Stages of kirana transformation
Source: Be a Supermarketwala, Damodar Mall
Location
Assessment
Funding
Assessment
Store
Layout
Procurement
of Technology
Product
Placement
Product
Assortment &
Pricing
Increased
Employment,
Better Engagement
Survey of the
catchment area or
families within a
radius of 1.5–2km
radius to:
• Identify customer
profiles,
demographic
parameters, social
parameters and
income class.
• Assess external
drivers such as
competitors and
their formats (e.g.
modern trade,
eCommerce), high-
traffic areas/times.
In general, there
should be at least
7,000–8,000 families
in the catchment area.
• Space cost:
The store can be
owned or rented.
If rented, the rent
should not be
more than 3% of
sales or 1/5th of
gross profit –
whichever is
higher.
• Capex: Calculate
money spent on
equipment,
furniture, civil and
interior work. To
make a rough
assessment - for
every 3,000 bills
per month, a store
will require one
checkout counter,
10 shopping
trolleys and 20
shopping baskets.
• Efficient “grid layout”
• Ideally, the store
floor should be
divided 75% to sales,
10% to office space
and 15% to receiving
and storage space.
• The store should
consists of:
– Aisles, Gondolas,
Wall-racks, Bins,
Pallets etc. for
product placement
– Checkout counters
with PoS.
– Shopping trolleys,
Shopping baskets.
Overall, store layout is a
key factor that impacts
customers’ perception
of the store.
Two key components
should be procured
while setting up the
store:
– Fully integrated
system retail ERP
of software that
covers order
placement, receipt of
goods, conversion,
billing, banking and
customer relations.
– PoS machine and
digital wallets
registration with
respective
companies.
The software are
generally procured from
different vendors which
are already selling such
solutions in the market,
basically procured &
implemented in the
store.
• The products inside
the store should be
classified into three
categories:
– Destination:
Includes key
household grocery
items such as rice,
dal and pulses.
– Convenience
– Impulse
• Similar products are
placed together
following the “top to
bottom, big to small”
and “left to right”
rules.
The kirana owners can
apply a mix of pricing
techniques to create a
pricing policy that
works best for them.
• They can price
FMCG products
2%-5% cheaper
than MRP to attract
customers.
• Offer schemes for
grocery products
such as more
discounts in case of
more purchases.
• Many non-branded
products tend to
follow market
pricing.
• They should also
adopt technology
for pricing
monitoring.
Transformed kirana
stores offer increased
employment as
compared to their
pre-transformation
traditional formats
• The traditional stores
were run by the
owner with one
employee at most,
but post-
transformation the
number of staff rose
by 3-4 employees.
• Transformation
reduces the physical
labor of staff
• Instills a sense of
pride and satisfaction
among employees.

Most of the stores can achieve return on investment within
12 to 24 months after transformation
Store
Size
(sq. ft.)
Daily
Average
Sales
Investment
Required for
Transformation*
Pre-
transformation
Monthly Profit*
Best-case scenario
(100% Revenue Growth in Six Months)
Post-transformation* -
Worst-case Scenario
(30% Revenue Growth in Six Months)
Post-transformation* -
Conservative
estimate
considered
Monthly
Profit
Profit
Growth
Excess
Monthly
Profit
Time for
Repayment
(in Months)
Monthly
Profit
Profit
Growth
Excess
Monthly
Profit
Time for
Repayment
(in Months)
120 8,000 204,000 11,376 30,132 165% 18,756 13 17,093 50% 5,717 39
250 16,000 366,250 23,112 60,624 162% 37,512 11 34,546 49% 11,434 35
400 25,000 553,000 36,000 94,500 163% 58,500 11 53,190 48% 17,190 35
700 50,000 976,500 78,300 194,400 148% 116,100 10 112,680 44% 34,380 31
1,200 75,000 15,99,000 108,900 283,500 160% 174,600 11 161,370 48% 52,470 34
2,000 100,000 25,95,000 124,200 356,400 187% 232,200 13 193,860 56% 69,660 40
* Assumptions: All amounts are in Rupees (Rs.)
Rent is considered to be Rs 60 per sq. ft.; Cost of goods sold is considered to be 85% of revenue; Staff salary is considered to be approx. 3% of revenue; Tax deduction is 10%; Signage one-time cost is considered Rs
50,000 for stores less than 500 sq. ft. and Rs 100,000 for stores more than 500 sq. ft.
Most of the stores—with average sales of more than INR 2,000 per sq. ft. per month
—can repay the borrowed capital within 3 years even where revenue growth is low (30% or under)

Challenges before & after transformation
Competition and price war with large
modern formats
What’s happening?
• FMCG companies need to cater all channels.
• Modern formats use hard negotiating power based on bulk
purchase.
• To compete with big stores, kirana owners must maintain
strong supply/sourcing. They have to be vigilant of prices of
all products, everywhere—mainly D-mart, Metro, Walmart
and distributors of neighboring towns.
• Retailers are buying goods at the lowest prices from
cheaper, alternative channels. This is also causing the slow
death of the distribution business.
Access to Funds & teething issues related to
licensing, slow digital adoption due to high tariffs.
Capability building of kirana owners to compete in the modern era
What’s happening?
• Currently, those taking the next step toward modernization are usually store owners who have
a strong network in the community, can get guidance from experts or have an educated
background. Even after modernization, management of business with strong sourcing is critical
for survival.
• Many kirana owners do not have such exposure which makes them unsustainable in the era of
modern trade & e-commerce.
Supply chain infrastructure for catering to small towns
What’s happening?
• Many FMCG companies do not have the capacity to cater to small towns and do not have
distributors’ presence for many brands.
• Retailers need to go to nearby cities for sourcing on daily/weekly basis to find the right
schemes and prices.
GST credit set-off issues
What’s happening?
• Many retailers are facing financial issues and challenges in filing GST due to non-payment of GST
by distributors/value chain partners.
87654321 Challenges

Even large independent modern chains are finding it
difficult to sustain operations
Large supermarket chain in Hyderabad
Many retailers think growth in the business will
improve their quality of life, however this growth also
comes with increased costs and multiple difficulties
in managing the business.
One of the popular chains in Hyderabad, this
supermarket is still finding it extremely hard to
survive in near future due to tremendous competition
with large modern formats, increasing real estate
costs to sustain brick-and-mortar business and
increased overhead costs of modern retail.
87654321 Challenges

SO, WHAT ARETHEENABLERS FOR
KIRANA STORE OWNERS TO
OVERCOME THESE CHALLENGES?
STAKEHOLDERS
87654321 Role of Stakeholders

Intermediary Traders
(Wholesalers)
Supply Chain System
(Goods Transportation)
Role of stakeholders
Payment
Companies
Traditional
Retail
System
E-commerce
Companies
Large Cash &
Carry Retailers
Complement
Retail Associations
& NGOs
FMCG
Companies
Support
Leverage
Government &
Compliance Agencies
Orchestrate
Kirana Store
Owners
Grow
Intermediary Traders
(Distributors)
Optimize
Consumer

Benefits to stakeholders
Stakeholder Benefits to stakeholders
FMCG Companies
• Direct visibility into all products reaching consumer
• Higher productivity in distribution process
• Availability of data in order to target consumers efficiently
• Increased sale of brands due to higher penetration
E-commerce, Cash-&-Carry
Retailers
and Payment Companies
• E-commerce companies can leverage modernized kirana stores for last-mile delivery to places they
cannot reach
• Large cash & carry retailers can also leverage the modern retail ecosystem to reach directly to consumers
• Business growth
Intermediary Traders and
Logistic
Providers
• Higher efficiency in distribution and logistics due to lower transaction costs, smoother coordination and
better control over products and specifications
• Knock-on effect on intermediate traders to create added value (without which they will be cut out),
thus acting as an incentive for them to modernize
• Emergence of specialized and dedicated ‘new-generation wholesalers’ and ‘third-party logistics
providers’ who concentrate on value-adding activities and use specific logistics equipment thus acting as
an incentive for them to modernize
Retail Associations & NGOs • Smoother coordination with traders for addressing demands of the community effectively

Role of stakeholders
Stakeholder Role of stakeholders
FMCG Companies
• Active participation in supporting retail modernization by implementing innovative retailing/marketing
techniques and promoting inclusive development of society
• Providing level-playing field to small modern retailers in terms of pricing – comparable to large modern
retailers
• Redefining “modern retail” definitions
• Rethink distribution strategy to plug gaps in rural distribution
E-commerce, Cash-&-Carry
Retailers and Payment
Companies
• Promote retail modernization by providing know-how transfer and technology support (such as PoS
machine)
• Access of products to retailers
Intermediary Traders and
Logistic Providers
• Modernize and create added value in the distribution process to complement retail modernization (e.g.
otherwise FMCG companies can directly reach modern store and intermediaries will be cut out)
Retail Associations & NGOs
• Capability building and educating kirana store owners about requirement, benefits and execution
process for undertaking transformation
• Connecting kirana store owners with the rest of the ecosystem partners to facilitate transformation
• Collaborating with ecosystem partners (such as government bodies) to enable retail modernization at a
national
scale (for example, creating retailer database for targeted policy making)

WHAT SHOULD BEDONETO
EXPEDITE RETAIL MODERNIZATION
IN ASUSTAINABLE MANNER?
ROLE OFGOVERNMENT AND
RECOMMENDATIONS
87654321 Recommendations

What does it mean to make policies
inclusive and sustainable?
It means having a strategy that takes into account social and environmental considerations—a strategy that focuses on the
integration of traditional producers, traders and retailers while, at the same time, not undermining the positive effects of
retail modernization.
Regulation & Compliance
• Zoning regulations
• Incentivization through tax rebate
• Credit rating system
• Single compliance mechanism
• GST simplification
Access to Resources
• Access to funds
• Improving supply chain infrastructure
• Fixtures/technology/software
Education & Training
Creating Awareness
How can the government assist local retailers?
Capability
Building
Competition
with Modern
Formats &
Other Issues
Access to
Resources

• We think the government is best placed to launch
awareness campaigns on kirana store transformation
through newspaper and other key media channels.
• The key aspects for communication include why and how
kiranas should modernize and what is in it for them.
01 Create awareness through media campaigns
Creating Awareness87654321 Recommendations

Undertaking large-scale programs for capability building for kirana
store owners/managers:
• through ITI.
• organizing locality-wise independent sessions by experts.
For example, the Chinese government offered improved infrastructure
for relocated retailers and trained them in business skills and food
safety. The result: goods offered for sale in the wet markets became
safer and more hygienic. Tax payments also increased.
02 Undertaking large-scale programs
for capability building
Education & Training87654321 Recommendations

• None of the stores had availed MUDRA loan for kirana transformation.
• Access to loans is still a difficulty for kirana store owners as they don’t have credit rating system equivalent to CIBIL
(even for stores that have been in existence for 50 years) and they have to raise funds from multiple sources
including private lenders, friends and family.
03 Access to funds or soft loans should be availed
specifically for the purpose of transformation
What was the problem
our research
identified?
• Customization of MUDRA Yojana for kirana transformation/new
modern format supermarket establishment.
• Loan amount of INR2 lakh to INR25 lakh (Kishor and Tarun may cover
stores with size less than 700 sq. ft.)
• Approval of loan based on store performance evaluation/feasibility
study (e.g. existing sales per sq. ft. more than Rs. 1500 per month as
per filings).
• Enablement of credit rating system (CIBIL equivalent) for stores with
long-term presence based on tax returns. This will incentivizes stores
to do business in the formal economy.
• Marketing of MUDRA for retailers through newspapers (by publishing
series of articles and creating awareness among the public).
Current MUDRA Offering Retailer’s Need
Shishu
Up to INR50,000
for first-time entrepreneurs
Kishor
INR50,000–500,000
for existing businesses
Tarun
INR5–10 lakh
for business expansion
What we suggest?
Access To Resources - Funds87654321 Recommendations

Copyright © 2020 Accenture. All rights reserved.Source: Making retail modernization In developing countries inclusive, GIZ, Germany, 2016; Accenture Analysis 48
• Research shows the development of supermarkets has historically been regulated much more heavily in the United States and Europe than in many
emerging countries.
• Major developing countries have regulatory frameworks for retail. Supermarket zoning restrictions prevail in nearly all East and Southeast Asian countries
as well as in several Latin American countries.
04 Implementing zoning regulations for retail
(size, numbers & form) in line with town planning
• Some US cities require retailers seeking to build stores larger than
100,000 sq. ft to pay for an economic analysis on the impact their stores
would have on the surrounding area. And numerous zoning requirements
define where supermarkets are allowed to be set up and what their
maximum size should be to keep competition with the local business
community in check or to protect historical townscapes.
• South Africa’s Competition Act – It asks authorities to consider not only
the expected impact of retail investments on competition, but also
potential effects that may be of public interest such as impact on
particular industrial sectors or regions, employment, the ability of firms
owned by historically disadvantaged persons or of small businesses in
general to become competitive, and the ability of national industries to
compete in international markets.
• Malaysia – In addition to zoning laws, building codes require retail outlets
to operate from their own building and set maximum floor spaces.
• Thailand – When zoning laws were found to be lacking in any
Thailand province, they were put in place to protect Thai-owned
local businesses.
• Kenya and Rwanda – Foreign retailers must comply with both outlet
site regulations and local urban planning provisions.
• Indonesia – Modern large-format retail outlets are not allowed to
open before 10 a.m. in Indonesia to protect the country’s hawkers
and neighborhood shops. Most of these businesses’ turnover is
generated in the early morning when traditional Indonesian
housewives tend to shop for household items.
• International retailers have found different ways to adapt to such
regulations. For example, by developing smaller formats like chains
of kiosks or convenience stores. This can be a desirable outcome
as it allows modern competitors to enter the market while forcing
them to adapt to local conditions.
Zoning regulations should ideally be well justified and based on empirical evidence that they
strike a good balance between retail modernization and protection of existing structures.
Regulation & Compliance - Zoning87654321 Recommendations

• Enablement of credit rating system based on income tax filings
incentivizes store owner to do business in the formal economy
as this credit rating will enable their access to funds.
• Also, incentivization in the form of tax rebate for transformed
stores can be given in order to promote modernization (based
on limits on number, size and form of the store).
05 Incentivization for doing business
in the formal economy
Regulation & Compliance87654321 Recommendations

Single licensing mechanism can be introduced for opening
supermarkets. This can:
• Reduce the cost of compliance.
• Simplify the process for retailers.
• Promote ease of doing business in the country.
06 Single licensing mechanism

• In many areas, retailers are facing credit set-off
issues due to delayed submission by value
chain partner.
• Delayed GST submissions by suppliers' blocks
retailer's money, hampering his working capital
• Hence, simplifying GST filing and collection
process is necessary to overcome teething
trade issues being faced by retailers
07 GST simplification to mitigate
credit set-off issue

• Improving rural supply chain in remote areas in order
to make goods and supplies accessible.
• Upgradation and facilitation of infrastructure for retail
and logistic zones (China, for instance, developed its
markets using public-private partnership and
privatizing management).
08 Improving supply chain infrastructure
Access To Resources87654321 Recommendations

• Access to cheaper resources required for transformation.
• Subsidizing technology cost – assistance to adopt digital
payment systems.
• Availability of centralized umbrella software for
governing grocery retail (similar to the concept of Unified
Payments Interface).
09 Easier and cheaper access to technology
and fixtures
Access To Resources87654321 Recommendations

• The government can influence companies to participate
in kirana transformation as part of their CSR activities
• Top 100 listed companies in India spent nearly US$1
billion on CSR activities in FY18, up 47% than in 2014*
10 Influence private sector to assist in
kirana store modernization
Access To Resources
* Note: 2014 was the year when Government of India made it mandatory for large companies to participate on
special development projects, with an investment of 2% of their net profits

• We recommend undertaking a pilot of kirana transformation pilot
in one state first.
• This will be an 8-12 month project to modernize x% kirana stores in
that state.
• Findings from the pilot can later be applied for a large-scale rollout
across the rest of the country.
• Key drivers which will influence which state to consider are:
How?
Pilot for kirana transformation
• Consumer readiness
• Kirana store owners’ readiness
• Presence of key ecosystem partners to aid in modernization.
For example, FMCG companies and associations.
• State government/organization support.

What TRRAIN is doing?
Motivating Kirana Store Owners Education & Know-How Transfer Ecosystem Engagement Rewards & Recognitions
Series of YouTube videos explaining
the importance and execution of
kirana transformation and all aspects
of the management of the business
• Seminars
• Success Stories Case Study
• Contact Programs
• Awareness through Social Media &
Websites
• One-day Basic Course
• 3 Days’ Advance Course
• Comprehensive Certificate Course
• Diploma Course
• Consultants
• Fixture Suppliers
• System Suppliers
• Other Vendors to Support
Transformation Projects
200+Kirana transformations done
along with multiple partners

Persona creation – methodology
• By doing a qualitative research, we were able to
understand the goals of the retailers.
• Personas will help us explore the possibilities to provide
the right model to scale different types of retailers.
Clusters that shape the personas
Needs,
Emotions,
Aspirations
Actions & Impact
Catchment Area,
Shopper Profile &
Behavior
Audience segmentation
87654321 Appendix

59
Young owner (under 40 years of age), usually self-owned, computer/Internet-savvy, educated, ambitions to grow the
business, catchment area of up-trading shoppers mostly under-served by big retail stores.(For instance, Saurabh)
Uptrading mid/low income consumers. Currently not very used to shopping in supermarkets. But starting to enjoy the
shopping experiences they provide. Highly value conscious. But open to trying particularly new brands of
food/beverages. Highly aspirational. Retail/kirana formats still under-developed in the neighborhood. Both “list based”
buyers plus growing walk-in, impulse purchasers
Highly positive – welcomes external help in transformation. Usually, these transformations are self-started by ambitious
owners. They then employ family members to manage growing operations or employ new people (1-3 new members).
Very open to receiving and applying store training, aid and software from experienced partners. Willing to invest up to
INR2 lakh in it.
Easy adoption of software (and CCTV) to manage store ops.
Actively churn inventory, storage far lower – on a weekly, fortnightly basis.
Observe shoppers keenly and rotate/order new SKUs such as peanut butter and brown bread based on customer demand.
Many of them prefer digital orders to FMCG companies versus physical orders because of lead time.
Impact
2-4X improvement in sales observed in the 3-6 month period after transformation.
Persona 187654321 Appendix
Shoppers profile
Attitude and drive toward transformation
Post-transformation adoption of modern retail techniques

60
Store has been with one family for 2-3 generations, have loyal old customers and happily serve them by retaining the “old
fashioned” kirana format, while applying modern retail techniques to manage store operations and improve basket
size/assortment (For instance, Milan Supermarket)
Usually high and middle-income consumers. Have a large shopping list on a monthly basis (INR10,000+ per household).
Apart from a fixed list, likes to be able to see/pick and choose among the brands visible in the shelf. Value conscious – but
could potentially up-trade to try particularly new brands of impulse food and beverages. Values the familiar/accessible
neighborhood store owner who could even potentially do home delivery/send someone along to drop groceries
Usually second or third-generation owners could be open to transformation, particularly the self-serve aspect of an ‘old
store’. But some members, including those from the older generation, have reservations about change in assortment, use of
software (which may make their earnings transparent, hence bring tax accountability). But usually have larger spaces to
transform (500+ sq. ft.). Overall mixed attitude, especially from those who still have not seen the benefits of transformation.
Mixed adoption of software (and CCTV) to manage store ops.
Inventory churn better – target 30-45 days. Earlier, it used to be 45-60 days, with a high 20-30% of expired/unused stock.
Always been a keen observer of shopper behavior and demand – and continue to do so. Software is an additional aid for
those who adopted it.
FMCG companies starting to consider them as supermarkets given their size/turnover/ability for display, etc.
Impact
Atleast 1.5-2X improvement in sales observed in the 3-6 month period after transformation. Increase in employment: At least 40%.
Shoppers profile

61
Very small store of less than 160 sq. ft, limited residential area, store owner not keen on growth, serving impulse, daily
needs only primarily snacks, biscuits, ice-creams, beverages, small pack skin and home care items, small quantities of
pulses, oils, etc. (For instance, Auntyji Store)
Usually middle-income neighborhood. Displays highly value-seeking behavior. Time is not a huge constraint. Would rather buy
monthly groceries in a modern retail format or from eCommerce sites wherever it is cheaper. Neighborhood is highly
residential, society with limited scope for growth. Shopping seen as an excursion like going to malls on a weekly basis. Moved
away from buying from kiranas to malls over the years. The neighbourhood kirana store is only to fulfill replenishment
items/impulse buys.
Typically, these are 120-160 sq. ft. stores. Attitude to transformation still not clear as not many of the shops of this size have
not found a clear model of transformation for such a small format. The stores we visited were newly opened with owners
having low experience in running a kirana business. So, they were happy to receive external help. They also like that
storage is better–inventory churned faster after transformation.
Low adoption of software/CCTV as everything can be “seen.”
Inventory churn better – target 7-21 days. Earlier, it used to be 1 month with lesser visibility of what was available/expired/moving.
Better assortment management as there is limited shelf space.
Storekeeper still the primary means to observe and react to shopper demand.
Not much attention received from FMCG companies.
Shoppers profile
Impact
20-30% increase in the 3-4 month period after transformation. No change in employment. More of a self-employment/survival
model (needs to be tested further).

62
Limited store area of approximately 200 sq. ft, keen on growth & transformation, strong aspirational catchment area of
middle/low middle-income neighborhood (For instance, Ambika Supermarket)
Low middle/middle-income neighborhood. Highly value-seeking. Strong presence of “floating” population–both residential
and corporate. Time could be a constraint. Shoppers buy and stock in smaller quantities.
Typically, these are 400 sq. ft stores. Positive attitude to self-serve formats as they feel it frees up time. Easy access to
products for shoppers. Like the better assortment/shelf management/inventory management/space utilization it offers.
Family owned, been with family for 1-2 generations. Visible change in format, benefits to shoppers
Better assortment management as there is limited shelf space.
Storekeeper still the primary means to observe and react to shopper demand.
Good adoption of software. Tax/traceability not as much of a concern.
FMCG companies have started to treat them as modern retail in Mumbai.
Impact
200% increase in sales.
Shoppers profile

63
Family-owned kirana stores having been in the family for 2-3 generations, transforming and adopting the chain format.
Making forays into serving newer types of neighborhoods. Transformation driven by the younger generation/enterprising
store owners (For instance, Kirana Ghar)
Mixed – Middle to upper middle-income neighborhood. Value-seeking behavior. Ready to experiment with newer/up-
trading products in certain categories (deodorants, impulse food and beverages). At the same time, monthly shopping of
groceries (grains, oils, pulses) is fixed and bought traditionally from this store. Mostly visited by shoppers in ones/twos
among households.
Typically, these are 450 sq. ft or larger stores. The second and third-generation prefers to do something “new,” bring fresh
thinking. Pride factor is critical–prefer to be owners of supermarket chains. Ability to increase assortment for shoppers and
tap into an entire household, especially younger members. Like the better store management that computerization brings.
Visible impact on sales, customer retention, basket size increase among shoppers. Success of one supermarket replicated to
expand to other areas.
Very strong adoption of software for billing.
Tax/traceability better.
FMCG companies have started to treat them as modern retail in Mumbai.
Better inventory management—15-45 days churn depending on category.
Still rely on traditional techniques to read and derive consumer insights and drive product assortment.
Impact
More than 200% increase in sales in the same store after transformation. Employment up by 60-100%.
Shoppers profile

64
New kirana store started by owner in the age group 30-40 years for income purpose due to diminishing returns from
existing business or lack of job opportunities (For instance, Sasta Bazar or A to Z)
Could vary depending on where the owner has space and/or
his familiarity with the neighborhood, etc.
Typically these are 350 sq. ft or larger stores. New kirana store owners–so, very open to new format, new ideas which
would help them scale up. Usually open to learning modern ways of managing store. Very knowledgeable about their
shoppers. Typically, they convert/extend their homes to open stores.
Use of software to manage store operations.
Comfort in ordering digitally, stocking minimal inventory or rotating inventory optimally.
Implement modern store-like techniques on their own. For example, loyalty programs, display and discounts.
Very hands-on shopper/store management.
Impact
Early to assess (1-6 months transformation). In some cases where the old format existed, more than 20% increase in sales seen.
Shoppers profile

65
Different approaches to retail modernization
Approach Laissez- faire Sequenced and assisted Protectionist
Features:
• Few regulatory constraints on FDI
• Limited checks and balances on conduct
• Limited development programs for suppliers
• Limited support for displaced local retailers
• Gradual opening of retail
sector
• Assistance provided to
suppliers and local retailers
• Heavily regulated
• Several hurdles to entry
• Highly protectionist, aims to
protect local and traditional
retailers
Typical
consequences
• Creates dominant foreign retailers
• Displacement of local retailers, no adaptation
• May lead to job losses
• No diffusion of technology and learning
• High social costs
• Able to exploit gains from
modern retailing
• Support and grow local firms
and suppliers (sustainable
development)
• Low social costs
• Forgoes efficiency gains from
modern retailing
• Widens productivity gap
between local and global
retailers
Regions/
countries: Many African countries, Latin America
China, Russia, South Korea and
other emerging countries
India, Vietnam, Malaysia
87654321 Appendix

66
Factors driving impact of transformation
Potential of the locality
Optimistic Scenario Pessimistic Scenario
Areas with highly untapped consumption potential.
For instance, outskirts of city, sub-urban areas, high
footfall areas like market or railway station. Stores
may acquire new customers in such areas.
Very limited scope to extend the basket size of
existing customers. For example, store within a
society.
Guidance received from experts in the field with
regular monitoring
Complete renovation or new setup with large
investment, change of location
Guidance received from entity with very low
involvement in store business and low involvement
by owner
Only change of shelf and store layout. This may result
in increased consumption by existing customers (due
to increased visibility of products, large packs)
In such cases, sales growth of
100–300%
can be observed.
In such cases, sales growth of
20–50%
can be observed.
Guidance received and
owner’s DNA
Level of transformation
completed
01
02
03
87654321 Appendix

Emerging economies have also used zoning laws to
regulate wet markets
China upgraded and trained business skills and food safety measures for wet markets and street hawkers
• Governments in emerging and developing economies have traditionally used zoning laws to regulate wet
markets and street hawkers in city centers—not just to prevent street congestion, but also because
informal retail activities are difficult to tax and wet markets in particular often cause hygiene problems.
Many governments, therefore, impose strict zoning regulations and hygiene standards for wet markets.
An example is China. When implementing these instruments, China, for instance, also included major
upgrading and development measures for street hawkers. Rather than leave wet markets to flounder and
collapse, the Chinese approach was based on “retaining but modernizing.” This included experimenting
with the privatization of wet market management, relocating hawkers and wet markets to uncongested
and permanent sites, and training hawkers in business skills and food safety. The result? Goods on sale in
the wet markets became safer and more hygienic. Tax payments also increased.
• In case of India, there is no exclusive regulatory framework for the retail sector. Regulation of the retail
sector is mainly in the domain of state governments. Different state governments have used different
regulations to protect small unorganized retailers from retail giants.
87654321 Appendix

Kirana Transformation in India

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