Flipkart deal done, Walmart India now plans to expand kirana store business
Walmart India has been piloting its Mera Kirana programe over the past four years and now wants to make it part of its mainstream business.business Updated: Jun 04, 2018 15:34 IST
Walmart India is planning to scale up its kirana store programme called Mera Kirana that helps small family-owned grocery stores modernise, while also opening a new fulfilment centre as part of a pilot run in a bid to expand its cash-and-carry footprint at a faster clip.
Walmart India has been piloting Mera Kirana over the past four years and now wants to make it part of its mainstream business, a top executive said in an interview. It is also planning to open another so-called “dark store”, or warehouse, in Lucknow over the next month or so.
Under Mera Kirana, Walmart creates zones in its Best Price wholesale stores that are designed to resemble a modern kirana store. They serve as a model for mom-and-pop (kirana) store owners to replicate when it comes to assortment and placement. The company also sends its teams out to kirana stores to work directly with them.
“We’ve seen a lot of loyalty from kirana stores because they understand that we are not just selling to them we are also helping them become modern. We’ve seen healthy double-digit growth in our membership base year-on-year,” said Rajneesh Kumar, chief corporate affairs officer at Walmart India.
Of the company’s 1 million active customer base, 70% are small mom-and-pop, or kirana stores. But many of these stores are not yet technology-enabled and that is where companies like Walmart, and its peers like Metro Cash and Carry Pvt. Ltd, come in.
These organised wholesalers work with small retailers to digitise their business, in some cases even handing out hardware and software for free. Keeping the mom-and-pop businesses strong benefits wholesalers. Metro Cash and Carry, for instance, is even considering acquisitions to aid it in digitising retail outlets.
Another tactic that Walmart is experimenting with in India is fulfilment centres. These centres will be housed in warehouses operated by third-party logistics firms, and will be used by Walmart to service kirana stores in the vicinity.
The company typically needs four acres to open a full-fledged Best Price store, and the process of getting requisite approvals and performing due diligence for these used to take up to four years earlier.
That time frame has shortened to 2.5 years in some cases, but is still much longer when compared with setting up a fulfilment centre. The first fulfilment centre that Walmart opened, in Bhiwandi near Mumbai, took just 60 days to become operational. “It (fulfilment centre) allows us to go to market faster and while store growth will continue aggressively, this is a complementary approach that we are building in to start serving kirana stores faster,” Kumar said.
Walmart, which earlier in May bought a 77% stake in Flipkart for $16 billion, has said in the past that it plans to open 50 new Best Price cash and carry stores. It currently operates 21 of these in the country.