New Delhi, Dec 10 : The rapid rise of e-commerce and quick-commerce platforms in India is causing a steep decline in income and livelihoods for thousands of local grocery and kirana shop owners, Federation of Retailer Association of India (FRAI) said on Wednesday.

The federation, which is a representative body of about 80 lakh micro, small and medium retailers from across the country with a membership of 42 retail associations, appealed to the government, highlighting the urgent need for stronger support for small retailers as they face an existential crisis due to the rising threat of e-commerce and quick commerce platforms.

FRAI, citing market studies, highlighted that at least two lakh Kirana stores had closed last year as consumers had shifted to quick commerce platforms such as Blinkit and Zepto.

Further, according to the industry body, a December 2024 study by JP Morgan on offline grocery stores in Mumbai showed that 60 per cent of them have seen a decline in their sales volume due to the mushrooming of dark stores of quick commerce platforms.

Over the past few years, digital platforms have reshaped consumer behaviour through deep discounts, rapid delivery promises, and aggressive marketing campaigns, leaving small retailers struggling to compete on an uneven playing field. As a result, many kirana stores are witnessing dramatic reductions in footfall and sales, FRAI noted.

â??Small retailers and kirana shopkeepers are facing an unprecedented challenge as e-commerce and quick-commerce platforms reshape the market. These enterprises, built over generations, are now struggling to survive against players with deep pockets and aggressive strategies," said Abhay Raj Mishra, Member and National Coordinator, Indian Sellers Collective and Honorary Spokesperson, FRAI.

We believe the government must urgently step in to create a fair, competitive environment and empower local retailers with the right technology, he added. Compounding the problem is the manner in which large, often foreign-funded e-commerce and quick-commerce companies engage with the small-retailer ecosystem.

Instead of empowering shop owners to grow their independent businesses, many of these platforms are turning them into delivery personnel or last-mile service agents. This shift discourages and diminishes entrepreneurship, converting once-independent proprietors into gig-economy workers with uncertain incomes and limited protections.

"Given this grim trajectory, there is an urgent need for a fair, well-designed support model that protects the interests of small retailers and local entrepreneurs," FRAI noted.

Without intervention, the backbone of Indiaâ??s informal retail economy risks collapsing â?? along with the livelihoods of millions of small-scale shop owners who have long served as the heart of community commerce.

The retailers in the event organised here urged the government to equip local Kirana stores with a dedicated technology platform that would enable them to compete fairly with quick-commerce companies and operate on equal footing. They recognised the growing consumer demand for faster delivery, greater convenience, and competitive pricing, and affirmed their readiness to embrace digital tools, enhance efficiency, and elevate customer service.

/IANS