ITC, Nestlé, Reliance and Others Shift Focus Back to Kirana Stores After Quick-Commerce Boom

India’s biggest fast-moving consumer goods (FMCG) players are turning their attention back to their roots — the humble kirana stores — after a year of aggressive growth on quick-commerce platforms like Blinkit, Zepto, Instamart, and BB Now.

Brands like ITC, Nestlé, Coca-Cola, Tata Consumer Products, Dabur, Parle, and Reliance are now rolling out fresh initiatives to reconnect with general trade — the traditional network of over 13 million mom-and-pop shops that still account for more than 90% of India’s FMCG sales.

This shift comes after growing tensions with distributors, who raised concerns about preferential pricing and better margins being offered to digital-first platforms.

Kiranas Still Hold the Fort

Despite the rise of instant delivery services, the majority of grocery sales in India still happen through local kiranas. These stores are a vital part of India’s retail ecosystem, especially in Tier 2 and Tier 3 cities.

However, in recent months, distributor associations have raised red flags. On 16 June, the All India Consumer Products Distributors Federation (AICPDF), representing over 4.5 lakh distributors, demanded pricing parity across channels. They alleged that FMCG firms were giving deeper discounts and better margins to online platforms — hurting traditional trade.

Kiranas Under Pressure

The impact has been visible on the ground. According to AICPDF, nearly 2 lakh kirana stores shut down in the past year as quick-commerce platforms took over a larger slice of the grocery pie. General trade saw a sharp 25–30% dip in sales between July and October 2024, including a lacklustre Diwali season.

The Federation of Retailer Association of India (FRAI), representing around 8 million small retailers, echoed similar concerns in December. It warned that without better digital access and policy support, India’s traditional retail backbone could collapse.

Quick Commerce Booms

Meanwhile, quick commerce continues its rapid expansion. A May 2025 report by Bain & Company and Flipkart pegged the e-grocery market at $6–7 billion in 2023, with platforms like Blinkit, Zepto, Instamart, and BB Now handling over two-thirds of online grocery orders.

What started with instant delivery of snacks and daily needs has now grown into bulk groceries and even electronics. Quick commerce players are projected to grow at over 40% annually until 2030. Flipkart and Amazon are also eyeing a slice of this fast-growing segment.

But this growth has come at a cost — straining ties between FMCG companies and their long-standing distribution partners.

Big Brands Make a U-Turn

In response, FMCG firms are taking several steps to rebuild trust with kiranas:

ITC is reshaping its distribution to give premium products better reach in kirana stores, with tailored incentives.

Dabur is deploying demand forecasting tools to help distributors manage stock better.

Coca-Cola is expanding a self-ordering platform to make pricing and delivery more transparent.

Parle has shortened restocking times to reduce cash flow pressure on retailers.

Nestlé is widening its direct-to-retailer reach.

Tata Consumer Products is offering higher margins on key brands to regain share.

Reliance Consumer Products is giving kiranas better availability and stronger margins.

Even as quick-commerce remains crucial for urban expansion, FMCG companies now realize they can't afford to neglect traditional trade. A balanced approach — blending digital innovation with strong ground-level retail relationships — may be the only way forward in India’s complex retail landscape.

For kiranas, this renewed focus could bring not just better products and profits, but also the digital tools they need to compete in an evolving market.