The Department for Promotion of Industry and Internal Trade (DPIIT) has directed the All India Consumer Products Distributors Federation’s (AICPDF) concerns about quick commerce platforms to the Competition Commission of India (CCI). According to a report by Mint, in a letter to the CCI, the DPIIT said that quick commerce entities are engaging in anti-competitive marketing strategies. It pointed that they are allegedly signing exclusive agreements with certain suppliers, giving specific vendors an unfair advantage and enabling them to dominate the market. 

The AICPDF is a trade body representing local retailers. It had earlier filed a complaint with the Ministry of Commerce and the DPIIT, noting that key issues in the quick commerce landscape were “being sidelined in the name of technology, convenience, and the Indian ownership of some firms”.

The AICPDF’s main complaints against quick commerce entities include running an inventory-based model, and violating existing FDI norms. It argued that dark stores were a way to bypass these FDI norms. It also stated that quick commerce entities partake in predatory pricing and deep discounting that affects competitive landscape. The body further said quick commerce platforms have concerning labour practices such as putting employees on a third-party pay roll.

The Growth of quick commerce in India

Quick commerce has seen a rapid growth in India in recent years. A  capital market company CLSA in its App-racadabra research report 2024 found that Blinkit is the market leader with a 39% market share, followed by Zepto which has a 28% market share but is only present in 15 cities in India. As the company expands, the report estimates further market share gains for Zepto.

The industry has also been under scrutiny for multiple instances of poor working conditions for its partners. States like Rajasthan and Karnataka have since introduced Bills to remedy these concerns while Kerala has mulled introducing a Bill to protect the rights of gig workers.

Quick commerce players have also reportedly been singled out for its advertising practices. In April this year it was reported that the Central Consumer Protection Authority (CCPA) had asked quick-commerce players like Swiggy, Instamart, Zepto, Blinkit and Big Basket to prove that they deliver in “10 minutes or less”, as claimed in their advertisements or change their taglines.

Criticisms of e-commerce

Similar to quick commerce, there have been multiple complaints filed against e-commerce entities for allegedly violating FDI policies. In 2020, CAIT urged the Department for Promotion of Industry and Internal Trade (DPIIT) to investigate Amazon and Flipkart for violating FDI policy. Specifically, it questioned Amazon’s investment into Future Retail and More Retail and Flipkart’s investment in Aditya Birla Fashion and Retail Limited. It alleged that these companies had pre-determined agreements with retailers which allowed it to offer deep discounts on certain products and violated FDI rules. 

 Minister of Commerce and Industry, Piyush Goyal also questioned these practices at launch of a report on ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India’. He said, “They [Amazon] are an e-commerce platform, legally they cannot do B2C [business to consumer]. [So] They create entities where Indians contribute to making those entities sadly. Then they get caught and start closing down those entities”. He further argued that Amazon is only re-routing the product sales through these entities to show that it is providing business-to-business (B2B) service.

Also Read:

• CLSA predicts Zepto will challenge BlinkIt’s dominance in quick commerce with cost cuts and private brands
• Govt Asks Quick Commerce Players To Prove 10 minute Delivery Or Change Ads
• Telangana Food Safety Task Force Finds BlinkIt Warehouse ‘Unhygienic’