2022 Global Report

Digitizing the Corner Shop

Executive Summary

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.

Man standing in his shop

About This Report

As a global fintech venture firm, Flourish invests in entrepreneurs whose innovations help advance financial health and economic resilience for people and small businesses. We have invested in technology platforms for small retailers, and we believe in the potential to embed digital financial services into these platforms to bring small business banking to the large, historically underserved retail segment.

We launched this Digitizing the Corner Shop research in partnership with Bain & Company and 60 Decibels to better understand corner shops across the globe and share learnings on how tech entrepreneurs can better serve their needs.

Across Brazil, Egypt, India, and Indonesia, we surveyed more than 800 corner shop owners and 800 of their customers to learn firsthand about their business pain points, competitive threats, aspirations, and digital behaviors. What we found was a vastly underserved corner shop market.

This research report outlines the opportunity for technology entrepreneurs and considerations for how to better serve corner shop owners through digital platforms and embedded finance offerings. We highlight case studies from our portfolio and share country-specific findings from our primary research, showcasing the voice of corner shop owners and the customers they serve.

Flourish partnered with Bain & Company, 60 Decibels, and digital platforms ApnaKlub, MaxAB, Mercê, and TaniHub to conduct a survey of 810 shopkeepers and 816 corner shop customers in India, Egypt, Brazil, and Indonesia, developing a framework to understand the digitized corner shop opportunity.