The All India Consumer Products Distributors Federation (AICPDF), representing India’s largest group of retail distributors, has approached the antitrust authority, urging an investigation into three quick commerce companies: Zomato’s Blinkit, Swiggy, and Zepto. The request, detailed in a letter dated October 18, alleges these companies are engaging in predatory pricing practices.
Quick commerce has rapidly gained popularity in India, offering consumers the ability to receive deliveries of various products, ranging from household groceries to electronics, in just around 10 minutes. This new trend has transformed shopping habits in the country and posed significant competition to e-commerce giants like Amazon.
The AICPDF, which consists of around 400,000 retail distributors affiliated with major brands like Nestle and Hindustan Unilever, claims that quick commerce firms are using aggressive discounting strategies and selling items below cost to attract customers. This tactic allegedly undermines the traditional distribution model, as many consumer goods manufacturers are now opting to connect directly with quick commerce platforms.
The letter highlights concerns that these practices threaten the viability of conventional retailers, stating it has become “impossible for traditional retailers to compete or survive.” The federation urged the Competition Commission of India (CCI) to implement protective measures to support the interests of traditional distributors and small retailers.
Neither Zomato’s Blinkit, Zepto, nor Swiggy, which operates the Instamart delivery service and is backed by SoftBank, responded to Reuters’ requests for comments. The CCI also did not address inquiries from the news agency, while AICPDF refrained from discussing the content of its letter.
Currently, annual sales on Indian quick commerce platforms are projected to surpass $6 billion (approximately ₹50,443 crore) this year. According to research firm Datum Intelligence, Blinkit holds almost a 40 percent market share, whereas both Swiggy and Zepto each command around 30 percent.
A government official disclosed that the CCI has the authority to launch an investigation if the complaints presented have merit. The official requested anonymity as they were not authorized to speak publicly on the matter.
Previous inquiries by the CCI’s investigative unit have found that larger e-commerce players such as Amazon and Walmart’s Flipkart violated local regulations through predatory pricing practices, which those companies have denied.
The rapid growth of the quick commerce sector is underscored by Zomato’s stock performance, having doubled in value this year, as Swiggy prepares to launch its Initial Public Offering (IPO), which is expected to exceed $1 billion (about ₹8,407 crore) in the upcoming weeks.
© Thomson Reuters 2024
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