The corner shop plays a vital role in neighborhoods across the globe. These millions of small stores, often independent and family-owned, are found on every street corner in local communities, ensuring neighborhood access to food and other essential household needs. Corner shops constitute a $900+ billion global industry and make up 90% of grocery sales in countries such as India and Egypt.

Corner shops are here to stay. Despite repeated predictions of the demise of the corner shop, our primary research across four emerging market countries indicates corner stores are here to stay and may become even more important to their communities. Across Brazil, Egypt, India, and Indonesia, 30% of consumers plan to buy more at their local corner shop, and 64% plan to continue to buy as much as they do today.

Shopkeepers face real business challenges, and they are adopting digital tools to address these challenges. Corner shops struggle with supply chain inefficiencies, paper-based business processes, minimal online sales, and limited access to finance and other banking services. At the same time, shopkeepers are increasingly digitally savvy, using smartphone, web, and messaging apps to support their business operations—a trend accelerated by the Covid-19 pandemic. Across the countries we surveyed, 55% of shop owners use messaging apps to run their business today, and 75% plan to increase their digital usage in the next 1–2 years.

Together, these factors point to the opportunity for a “digitized corner shop:” a more efficient, responsive, and competitive mom-and-pop retailer with the latest technology and better access to important business services.

The opportunity to digitize corner shops is huge. Technology start-ups are emerging to serve corner shops across the retail value chain, developing low-cost, online tools for sourcing and logistics, business management, sales, and embedded financial services. When implemented at scale, these tech solutions can unlock a 60-100%+ increase in corner shop earnings.

As the digitized corner shop ecosystem matures, early technology platforms can develop into trusted service providers. To serve the corner shop market, technology entrepreneurs must determine:

• What to Solve: Develop an online business solution to address specific pain points, with an easy-to-adopt “hook” product and additional services to deepen the relationship with the shopkeeper.
• How to Monetize: Address underlying retail value chain inefficiencies to better capture revenue through supply chain margins, service fees, profit-sharing, or embedded finance offerings.
• When to Invest vs. Partner: Determine what services to own in-house and what to source through local partners based on the existing digital, logistics, and financial infrastructure in each market.

With deep experience investing in fintech startups across the globe, Flourish Ventures undertook this research of corner shop owners and their customers to highlight the “digitized corner shop” opportunity. With this report, we aim to provide a framework supported by primary data and case examples to inform entrepreneurs and investors, thereby helping corner shops access modern digital services, do business more easily, and better serve their communities.