Capitalism, Technology, and the Evolution of Retail: The Story of Quick Commerce and Kirana Stores

In recent years, many have become disillusioned with capitalism, especially in the West. Property prices have skyrocketed, making homeownership a distant dream for many, and there’s a growing sense that the system is rigged in favour of the wealthy. A significant number of young Americans feel they will never be better off than their parents, a stark contrast to previous generations.

On the other hand, India’s economy is at a pivotal moment. The nation has experienced robust growth over the past decade and is expected to continue on this path. One example is, the rise of quick commerce, which isn’t just a story of convenience: it’s a direct outcome of capitalism in its modern, technology-driven form. At its core, capitalism promotes competition, efficiency, and consumer-centric growth, driving businesses to constantly innovate or risk falling behind. Quick commerce is a prime example, where convenience, speed, and competitive pricing define success. However, as we witness the effects of this on traditional Kirana stores, it raises questions about capitalism’s impact on small businesses and local communities.

The “Pure” Capitalistic Drive Behind Quick Commerce

Capitalism, in its essence, pushes companies to deliver better services at lower costs, creating more value for consumers. Quick commerce thrives on this principle. With substantial backing from investors and tech innovation, companies like Dunzo, Zepto, and Swiggy Instamart have expanded rapidly, setting new standards for convenience. For consumers, capitalism delivers, offering products within 10 minutes, often at competitive prices. Yet, this intense competition also means small, traditional businesses, like Kirana stores, are facing an existential crisis. Unlike large tech-driven companies, these stores often lack the resources to invest in advanced logistics, digital platforms, or aggressive marketing strategies. In a purely capitalist market, they struggle to compete.

Capitalism’s “Creative Destruction” and the Impact on Local Businesses

Economist Joseph Schumpeter’s concept of “creative destruction” perfectly captures this scenario. As new business models emerge, old ones may become obsolete, paving the way for more efficient ways to meet consumer demands. The rapid expansion of quick commerce in India has significantly impacted traditional Kirana stores, leading to closures and necessitating adaptation to digital platforms. According to the All India Consumer Products Distributors Federation (AICPDF), approximately 200,000 Kirana stores have shut down, with metro cities experiencing the greatest impact, accounting for 90,000 closures

However, capitalism also creates opportunities. The sector’s Gross Merchandise Value (GMV) increased from USD 0.5 billion in FY22 to USD 3.3 billion in FY24, a 280% surge. Quick commerce has generated over 1,000,000 jobs in delivery services, providing livelihoods to many who may have struggled in traditional retail roles. For many workers, these jobs offer flexibility and access to income, albeit with trade-offs in stability and benefits compared to traditional jobs.

Government’s Role: Balancing Capitalistic Growth with Societal Support

As capitalism propels innovation and competition, the government plays a critical role in ensuring that small businesses aren’t left behind. In India, several initiatives support Kirana stores in adapting to the digital era, recognizing that technology is crucial for sustaining small businesses in a fast-evolving market:

1. Digital MSME Scheme: This program provides financial aid, training, and resources to help small and medium enterprises (MSMEs) integrate digital tools, improving competitiveness and operational efficiency. The goal is to empower Kirana stores to leverage technology just as effectively as larger companies. By 2023, over 100,000 MSMEs had received support under this scheme, with a budget allocation of ₹5.6 billion (Invest India, 2023).
2. Startup India and MUDRA Loans: These initiatives offer funding support, with MUDRA loans helping micro-entrepreneurs modernize and digitize. Such schemes embody a capitalist principle—investment in growth—while ensuring local businesses have the means to adapt. Since its inception, 60,000 startups have benefited, with 15% in the retail technology and logistics sectors, supporting both small business modernization and employment (Startup India, 2023). In the 2022-2023 fiscal year, over ₹3.5 trillion was disbursed through MUDRA loans, with 40% of beneficiaries being micro-entrepreneurs in the retail sector (Ministry of Finance, 2023).
3. E-Commerce Training Programs: Some state and central government initiatives offer training in e-commerce, digital payments, and inventory management, enabling small retailers to reach wider audiences and offer services like quick delivery. The policy proposes that platforms like Amazon and Flipkart create equal opportunities for small sellers, with 30% of e-commerce sales to come from MSMEs by 2025.

The Path Forward: A Hybrid Model Blending Capitalism with Community-Centric Values

While capitalism rewards efficiency and innovation, its full benefits come when it’s balanced with community-centric values. Kirana stores can embrace the best of both worlds by adopting a hybrid model—leveraging technology for efficiency while retaining the personal touch and local knowledge that make them unique.

• Personalized Service with Digital Integration: Kirana stores can create a unique value proposition by offering services that quick commerce apps lack—personal relationships, custom orders, and community-oriented offerings. Digital tools can help them meet consumers’ demands without losing their neighbourhood charm.
• Local Employment and Sustainability: By using local delivery staff and embracing technology that optimizes resources, Kirana stores can foster sustainable practices. This approach aligns with consumer preferences for eco-friendly and community-supportive businesses, positioning Kirana stores as local champions within a capitalist market.

Quick commerce is a testament to capitalism’s ability to drive rapid innovation and meet consumer needs. However, as it reshapes the retail landscape, it also presents challenges for traditional businesses. The survival of Kirana stores lies in their ability to adapt and innovate, leveraging technology to stay competitive while maintaining the personal, community-focused approach that sets them apart.

As consumers, we play a part in this narrative too. Supporting local stores, when possible, helps sustain the community fabric while encouraging businesses to evolve. With the support of government initiatives and a balanced approach to capitalism, Kirana stores can continue to serve us in new, innovative ways—preserving a blend of tradition and technology for a sustainable, consumer-centric future. Also, by avoiding the over-interventionist policies that have distorted capitalism in the West and instead focusing on balanced governance, small-scale enterprises, and sustainable growth, India can build a more inclusive and prosperous future.