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  1. FMCG distributors seek CCI probe of quick commerce platforms Swiggy, Blinkit, Zepto for alleged predatory pricing

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FMCG distributors seek CCI probe of quick commerce platforms Swiggy, Blinkit, Zepto for alleged predatory pricing

Upstox

2 min read | Updated on October 21, 2024, 12:13 IST

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SUMMARY

In a letter to CII, AICPDF said, "Quick commerce platforms operating dark stores appear to intentionally bypass regulations governing inventory-based e-commerce."

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Quick commerce platforms are online retailers offering fast delivery of goods, typically within 10 minutes to 30 minutes.

The All India Consumer Products Distributors Federation (AICPDF), India's largest association of retail distributors, has urged the Competition Commission of India (CCI) to probe quick commerce players such as Zomato's Blinkit, Zepto, and Swiggy for alleged predatory pricing, monopolistic tendencies, and deep discounting, according to a report by Business Standard, citing a letter dated October 18.

The association of fast-moving consumer goods (FMCG) distributors also raised concerns about quick commerce platforms' operation model in relation to the Foreign Direct Investment (FDI) regulations.

Quick commerce platforms are online retailers offering fast delivery of goods, typically within 10 minutes to 30 minutes.

In a letter to CII, AICPDF said, "Quick commerce platforms operating dark stores appear to intentionally bypass regulations governing inventory-based e-commerce."

The letter said that the appointment of quick commerce firms as direct distributors of FMCG products by various companies is making "it impossible for traditional retailers to compete or survive," the report said.

The letter, accessed by Business Standard, stated that quick commerce platforms grew using franchise models without sufficient due diligence. AICPDF urged CCI to create a standard "Franchise Act," like franchise laws in the United States, to protect franchisees' rights.

AICPDF's letter to Piyush Goyal

The FMCG distributors' body had first raised the matter in August, demanding immediate scrutiny on the rapid and unregulated growth of quick commerce companies.

In a letter written to Commerce & Industry Minister Piyush Goyal, AICPDF said that quick commerce platforms are creating an "uneven playing field", threatening the livelihoods of millions of small retailers and distributors who have been the backbone of India's retail sector for decades.

"We are witnessing the erosion of small 'mom-and-pop' stores and a shift in the FMCG distribution landscape, as these platforms are increasingly being appointed as direct distributors by major FMCG companies, side-lining traditional distributors," AICPDF had said in the letter.

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