• India's largest retail distributor group has called for an antitrust investigation into three quick commerce companies - Zomato's Blinkit, Swiggy, and Zepto.
• The All India Consumer Products Distributors Federation (AICPDF) accuses these firms of predatory pricing, sidelining traditional salespeople.
• The Competition Commission of India (CCI), which can initiate investigations, has not yet responded.
• This development reflects a global trend where traditional retailers feel threatened by the rise of e-commerce and quick commerce platforms.

India's largest retail distributor group has recently appealed to the antitrust authority to investigate three quick commerce companies - Zomato's Blinkit, Swiggy, and Zepto. The allegations revolve around predatory pricing, a practice that involves offering deep discounts and selling below cost to attract customers. This development comes amidst the rise of quick commerce, a new shopping trend in India that promises deliveries of anything from groceries to electronics within 10 minutes, thereby challenging e-commerce giants such as Amazon.

The All India Consumer Products Distributors Federation (AICPDF), which represents 400,000 retail distributors of major companies including Nestle and Hindustan Unilever, has accused these quick commerce firms of practicing predatory pricing. The companies in question, Zomato's Blinkit, Zepto, and Swiggy, which runs the Instamart delivery service and is backed by SoftBank, have not responded to these allegations.

The AICPDF's letter to the antitrust body also highlighted that several consumer goods companies were dealing directly with quick commerce firms to increase their reach. This has resulted in the sidelining of traditional salespeople who have been delivering orders from one shop to another for decades.

The Impact on Traditional Retailers

The federation has argued that such practices make it impossible for traditional retailers to compete or survive. The letter, which is not public but was seen by Reuters, urged the Competition Commission of India (CCI) to implement protective measures for traditional distributors and small retailers to safeguard their interests.

The CCI, which has the power to initiate an investigation on its own if it finds merit in complaints, has not responded to a query from Reuters. The AICPDF has also declined to comment on its letter.

The quick commerce sector in India is booming, with annual sales on Indian quick commerce platforms set to exceed $6 billion this year. Blinkit holds a nearly 40% market share, while Swiggy and Zepto hold around 30% each, according to research firm Datum Intelligence.

Previous Allegations and the Future of Retail

This is not the first time the CCI has been called upon to investigate allegations of predatory pricing. In August, the CCI's investigation unit found that larger e-commerce players, Amazon and Walmart's Flipkart, had breached local laws through predatory pricing, allegations that the companies deny.

The quick commerce sector's strength is evident in the performance of companies like Zomato, whose shares have doubled this year. Swiggy is also set to launch its over $1 billion IPO in the coming weeks.

This development is a part of a larger global trend where traditional retailers are feeling threatened by the rise of e-commerce and quick commerce platforms. In the past, similar concerns have been raised in other countries as well. For instance, in the US, Amazon has faced criticism and legal challenges from small businesses and traditional retailers who accuse the company of monopolistic practices and predatory pricing.

In conclusion, the rise of quick commerce in India is reshaping the retail landscape, bringing convenience to consumers but also posing challenges to traditional retailers. The outcome of the AICPDF's appeal to the CCI could have significant implications for the future of retail in India. It remains to be seen how the antitrust authority will respond to these allegations and what measures, if any, will be implemented to protect the interests of traditional retailers.

Reset