JioMart, Money but Model?

Out of 12 Million Kirana stores, 80% are in Tier 2 and Tier 3

I’m from a Tier 3 town in India. Unlike cities I’ve been living in from last 12 years, Tier 2 and 3 in India, is still very closely knitted society.

I’ve always been intrigued by grocery business, as some of my close relatives are in business and has successful Kirana Shops. Kirana shops considered to be “constantly milking cow” in these societies. Whenever someone thinks about setting up a small business, Kirana shop considered to be the best idea. Qualifications are ‘decent amount of initial capital’, ‘good with people relations’ and ‘quick at basic maths’.

Kirana shop owners are among leaders in these lower middle class societies, as they are well connected due to nature of business and people skills. Being in a not so comfortable closely knitted society, People have strong empathetic, social and financial ties with each other. Kirana stores are integral part of this ecosystem. For a successful Kirana store, these ties translate into customer loyalty.

I have no need to look far, as I’ve a suitable example of these ties at my own home. My parent’s has been shopping their grocery needs from same shop last 30 years. To add upon this fact, Our close relative’s Kirana shop is just 500 mtr away, But they never got an grocery order from us, as their shop came later in existence.

Can JioMart taking forward their customer demand aggregation model in tier 2 and 3, put enough money on table to break these ties? I’m skeptical.

On the other hand, Do Kirana stores enjoying customer loyalty, have need to tie-up with JioMart, keeping their societal wisdom that “Dhandha barabar walon me hota hai” aside?

What have they undestood from Sahara QShop failure?, They too had big pockets.

These tier 2 and tier 3 kirana stores are driven by relations, not money. You can’t replace these relations without offering a better one in return.