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Indian Retail Distributors Call for Antitrust Probe into Quick Commerce Firms

By  |  October 21, 2024

India’s largest association of retail distributors has urged the Competition Commission of India (CCI) to investigate three major quick commerce companies — Zomato’s Blinkit, Swiggy, and Zepto — over allegations of predatory pricing. According to a letter dated October 18, the All India Consumer Products Distributors Federation (AICPDF), which represents 400,000 retail distributors, claims that these platforms are offering unsustainable discounts, undercutting traditional retailers.

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    Quick commerce has rapidly gained popularity across India, with companies promising delivery of groceries, electronics, and other items within just 10 minutes. This model is transforming the country’s retail landscape and posing significant challenges to established eCommerce giants like Amazon. However, it is also drawing criticism from traditional retailers, who are finding it difficult to compete with the deep discounts and fast service offered by these platforms.

    In the letter, which Reuters reported on Sunday, AICPDF specifically accused Blinkit, Zepto, and Swiggy’s Instamart of offering prices that are below cost in an effort to attract customers and increase their market share. This practice, commonly referred to as predatory pricing, has led to fears that traditional distribution channels are being bypassed. Many consumer goods companies, including major names like Nestlé and Hindustan Unilever, have started working directly with quick commerce platforms, leaving traditional distributors out of the loop.

    “These practices make it impossible for traditional retailers to compete or survive,” the AICPDF letter stated, according to Reuters. The group has called on the CCI to implement protective measures that would safeguard the interests of smaller retailers and distributors who have long been a cornerstone of the Indian retail market.

    Zomato, Swiggy and Zepto did not respond to Reuters’ requests for comment. Likewise, the CCI and AICPDF also remained tight-lipped, with the antitrust authority declining to respond to media queries about the complaint.

    According to research from Datum Intelligence, India’s quick commerce market is projected to generate over $6 billion in sales this year. Blinkit leads the sector with approximately 40% market share, while Swiggy and Zepto follow closely, each holding about 30%. As the sector continues to expand, pressure is mounting on regulators to address concerns about competition.

    The CCI has the power to initiate investigations independently if complaints are deemed credible. A government official, speaking to Reuters on condition of anonymity, suggested that the antitrust body could take action if it finds merit in the allegations brought by AICPDF.

    Source: Reuters