The problem, in one number
At a retail-tech SaaS I worked at, our largest customer segment by count was grocery — kirana stores. It was also the segment with the highest churn, the thinnest margins, and the most discount pressure at every renewal.
On paper, it looked like a growth story. In the P&L, it looked like a slow leak.
This isn’t a company-specific quirk — it’s structural to the category. Kirana stores make up the overwhelming majority of India’s grocery retail; by most estimates, roughly 12 million stores account for around 90% of grocery sales. But digitization inside that base has historically been shallow — of India’s 12+ million kirana stores, industry estimates put the number with actual app-based digitized operations at around 15,000, a rounding error against the total. The easy conclusion was that kirana simply couldn’t afford software. The real answer took longer to find, and it wasn’t really about money.
Diagnosing it correctly
The instinct when a segment churns hard is to fix retention — better onboarding, win-back campaigns, loyalty perks. We tried versions of that. It didn’t move the number, because retention tactics can’t fix a mismatch that isn’t really about retention at all.
So instead of asking “how do we keep these customers,” we asked a different question: what were they actually trying to do with the product, and why weren’t they willing to pay for it?
Going back through support tickets, sales call notes, and onboarding drop-off data, the pattern that emerged wasn’t budget. It was substitution. An app-based storefront put a kirana store in direct competition with Blinkit and Zepto — for exactly the customers most likely to abandon them anyway: younger, convenience-first, price-agnostic shoppers who’d order from whoever showed up fastest. Meanwhile, the customers a kirana store could actually retain — older, relationship-driven, the kind who visit as much to talk as to shop — never wanted an app in the first place. WhatsApp, or a conversation at the counter, did that job better than any storefront we could build.
In other words, kirana’s low willingness to pay wasn’t a budget problem. It was that the product was quietly competing with the one relationship kirana owners could actually keep, while doing nothing for the one they’d already lost.
What we did about the pricing, not just the roadmap
Once that was clear, forcing a paid tier onto kirana stopped making sense — we weren’t going to price our way into a channel mismatch. Instead, we kept the segment on a freemium model: free for kirana, monetized elsewhere. The founder’s original mission — bringing a huge number of India’s retailers online, kirana included — never changed. What changed was the economics underneath it. The mission stayed intact. The monetization got smarter.
The vertical we ruled out — and why
Pharmacy retail looked tempting on paper: a large, fragmented, still-digitizing base. We ruled it out anyway. Pharmacy retail requires drug-license and regulatory compliance credentials we didn’t hold, and layering that compliance burden onto a horizontal commerce platform would have meant building — and certifying — an entirely different product, not extending the one we had. Chasing total addressable market without the right to actually operate in it isn’t expansion. It’s a distraction with a bigger number attached.
Where we went instead, and why
We expanded horizontally into fashion, white goods, D2C brands, and manufacturing — and the case for each held up in the market data, not just in inbound lead volume.
Fashion was the clearest growth bet. India’s online fashion retail market was valued at roughly $21.6 billion in 2025 and is projected to reach around $98 billion by 2032. Fashion sellers also needed heavier catalog and variant management than grocery ever did, which played directly to strengths we’d already built.
White goods and D2C brands offered something grocery couldn’t: basket size. Higher transaction values meant sellers in these categories could actually absorb a software subscription without it being a rounding error against their margin — the exact problem we’d had with kirana.
Manufacturing and B2B rode a genuinely large structural tailwind, with India’s B2B online marketplace opportunity estimated to reach roughly $200 billion by 2030 — underserved infrastructure, not a crowded consumer category.
Each pick answered the same question differently: does this vertical have the workflow we already support, and can the buyer actually pay for it without competing against a relationship they’re not willing to give up?
Results
2,500+ new customers onboarded across the expanded verticals, 80+ product gaps resolved, DAU/MAU up 12%, support ticket volume down 40%.
The takeaway
The biggest shift wasn’t a rebrand or a new campaign. It was recognizing that a high-churn segment isn’t always a pricing failure — sometimes the product is quietly asking a customer to pay for something that competes with the one relationship they actually value. Once we saw that, the fix wasn’t a better retention campaign. It was matching the model to the segment: freemium where the product was substitutive, paid where it was additive — and picking the next markets based on where we could actually serve the buyer, not the biggest numbers on a slide.
If you’re staring at a segment that won’t stop churning no matter what you throw at it, it’s worth asking the same question we did: is this a pricing problem, or is the product quietly competing with something the customer isn’t willing to give up?
