A JP Morgan study in Dec 2024 found that 60% of offline grocery stores in Mumbai saw sales decline due to the proliferation of dark stores

Small and medium kirana retailers, hit by rising competition from e-commerce and quick-commerce platforms, have urged the government to create a dedicated national technology platform to help them compete on equal terms.

The Federation of Retailer Association of India (FRAI) said a Bharat Taxi-like digital system is needed, where customer orders are routed to nearby kirana stores and fulfilled by the first shop that accepts the order. FRAI warned that the rapid expansion of platforms such as Blinkit and Zepto has significantly eroded the income of local shopkeepers.

Citing a market study, FRAI said at least two lakh kirana stores shut down last year as consumers shifted to quick-commerce. A JP Morgan study in December 2024 found that 60% of offline grocery stores in Mumbai saw sales decline due to the proliferation of dark stores.

FRAI represents 80 lakh micro, small and medium retailers across 42 associations. It said deep discounts, ultra-fast deliveries and heavy marketing by large platforms have reshaped consumer behaviour, leaving traditional retailers struggling. Many foreign-funded hyperlocal delivery companies, instead of empowering shop owners, were reducing them to delivery agents, the association claimed.

FRAI said government intervention is essential to prevent the collapse of the informal retail ecosystem. A tech platform with customer-rating features could help kiranas improve service quality and stay competitive. FRAI added that ONDC offers a promising model for giving small businesses digital visibility and a level playing field.