It’s also not clear what problem they are solving, says Singhal, as most kiranas already take orders via WhatsApp and deliver to customers’ doorstep. The only explanation, he says, is a global glut of capital groping around for investment opportunities in an era of low interest rates. “To me, this excitement is on account of this unshackled pressure of money, which is forcing these entrepreneurs to defy economic sense,” he says.
There are few signs the money taps will shut off soon, says Anand Ramanathan, a partner at Deloitte India. Investors have been throwing money at Indian startups for at least a decade, scrambling to get a foothold in a nation whose overall consumer markets could be worth $6 trillion by 2030, according to the World Economic Forum. “Do any of these models make money? Is it sustainable? They’re not even close,” he says. “It’s all just a customer acquisition game.”
India does have features that may make it a better fit for quick commerce than Western countries. Indians buy groceries more frequently than shoppers in the developed world, says Zepto’s Palicha, and its crowded cities make it possible to reach a large number of customers from a single dark store. “This model thrives on density,” he says.
There is evidence that in parts of India’s biggest cities, kiranas are starting to feel the pinch. In a residential neighborhood on the border of HSR Layout—an up-and-coming suburb in the south of Bangalore that has emerged as a major startup hub—shopkeepers were unanimous that online shopping was cutting into their profits. Ashraf Puncheehar says business at his shop has dropped by 20% in the last six months. “Day by day, new companies are coming online,” he says. “You can’t compete with them.”
Even if it’s unlikely that kiranas suffer a widespread die-off anytime soon, localized retrenchments are a possibility. That could lead to a process of what is known as “infrastructural exclusion,” says Aaron Shapiro, an anthropologist at the University of North Carolina at Chapel Hill. In the West, the shift from neighborhood stores to larger supermarkets saw companies abandon what they deemed “unviable markets” in poor areas, leading to “food deserts” where residents have limited access to healthy, affordable groceries. In India, the phenomenon could take on a unique flavor. Mohammed Ryaz, a regular customer at a kirana in Chamrajpet, says the shop was a lifeline to less tech-savvy customers during lockdowns. “These are not educated people—they don’t know how to place an order [online],” he says.
Another concern is the impact on delivery drivers. More than 80% of India’s economy is informal, meaning workers have no official employment contract and aren’t protected by employment laws. So for many Indians, gig work isn’t markedly different from their alternatives. But the unpredictability of wages due to sporadic work and incentive-based earnings still bothers many gig workers, says Aditi Surie, a sociologist at the Indian Institute for Human Settlements (IIHS). “It actually leaves people feeling this inner sense of precarity,” she says. “You have no way of really calculating what is going to happen with your wages next month.”
A Dunzo delivery driver, who didn’t want to be named, said he doesn’t mind the work and regularly pulls 12-hour shifts. But it’s only really worth his time if he hits an incentive target of 21 orders a day, which boosts his wages by nearly 50%. “It is a waste if I don’t get any incentives,” he says. “All my efforts are gone in vain.” He typically hits the target eight to 10 days per month.
A helping hand
Why, if India already has a hyperlocal retail network perfectly tuned to the needs of every community, should anyone spend money building a new one? A host of “kirana tech” startups have decided there’s no need. Instead, they’re building tools to help the shops compete with the behemoths of modern retail. “We see the network of kirana stores in this country as a national infrastructure comparable to probably the power grids or the railroads,” says Prem Kumar, CEO of the digital technology company Snapbizz.