MUMBAI: Kirana stores and FMCG distributors have approached the fair trade regulator seeking an investigation into the anti-competitive practices of quick-commerce platforms like Swiggy Instamart, Zepto & Blinkit.
In a petition submitted to the Competition Commission of India on Feb 28, industry body All India Consumer Products Distributors Federation (AICPDF), which represents small retail businesses, alleged that these platforms are resorting to deep discounting and predatory pricing, pushing small retailers out of business. Their conduct, the industry body, said “appears to eliminate” competitors from the market. TOI has reviewed parts of the petition. AICPDF confirmed submission of the petition but declined to share details. Zepto and Swiggy Instamart declined to comment on the matter while Zomato did not respond.
The industry body alleged that the platforms have deep pockets and are “indulging in deliberate losses by way of predatory pricing” to expand in the market. It said that small retailers and traditional distributors are not able to match the discounts offered by the platforms, thereby taking a business hit and slipping into losses.
In certain cases to lure new customers, quick-commerce platforms dole out introductory offers in addition to the discounts, which often are in the nature of predatory pricing, AICPDF alleged.
The federation has been taking on quick commerce platforms, having sent a letter to the CCI in Oct through the ministry of commerce. This time, however, they have directly filed a petition with the CCI.
Quick commerce, or 10-minute delivery platforms, which initially started out selling groceries have rapidly expanded especially in the metros and have moved beyond kitchen staples to sell a range of non-grocery items including small appliances, mobile phones, electronics,jewellery and apparel. Brands, which have found a new avenue of distribution with quick commerce, are more than willing to test the rapid delivery model and continue to partner with these platforms as they are being able to reach more customers.
A survey by market research firm Datum Intelligence late last year covering 3,000 respondents across 10 cities had showed that about 82% of buyers have moved at least 25% of kirana purchases to quick commerce. Investor appetite for quick commerce has surged amid wide consumer adoption with Zepto bagging $1.2 billion in funding last year in an otherwise tepid market. The company is planning to file for public listing this year. AICPDF said that quick commerce is “wiping out millions of retail shops and distributors from the market”.
Offline retailers across segments who have already been hit by the advent of online commerce is up against rapid delivery platforms. Already, the National Restaurant Association of India (NRAI) is pursuing a separate legal case against 10-minute food delivery services (offering private labelled food) by Zomato and Swiggy.
