Centre Steps In To Check If Quick Commerce Growth Is Hurting Kirana Stores Biz

SUMMARY

Multiple government ministries have begun examining whether the unfettered growth of quick commerce is “unfairly disrupting” the business of traditional mom-and-pop (kirana) stores

This comes just days after a retailer body wrote to Union minister Piyush Goyal seeking a probe into business practices of quick commerce players such as Blinkit and Swiggy Instamart, flagging violation of FDI norms

Recently, Goyal also criticised the predatory pricing policies of ecommerce players like Amazon

Amid concerns that the “unchecked expansion” of quick commerce platforms such as Blinkit and Swiggy Instamart is hurting India’s kirana sector, the Centre has reportedly stepped into the matter.

As per Moneycontrol, multiple government ministries have begun examining whether the unfettered growth of quick commerce is “unfairly disrupting” the business of traditional mom-and-pop (kirana) stores.

The Centre is reportedly looking into the rise of quick commerce to determine whether it has had a direct impact on kirana stores.

However, the report added that the discussions are at a preliminary stage and the government does not plan to implement any policy changes at the moment.

This comes just days after retailer body All India Consumer Products Distributors Federation (AICPDF), in a letter to union minister Piyush Goyal, voiced concerns over the “rapid growth” of quick commerce players such as Blinkit, Zepto and Swiggy Instamart, saying it is causing the “erosion” of small mom-and-pop stores.

The retailer association claimed that quick commerce platforms have begun undermining the viability of brick-and-mortar stores and called for regulations in the sector to “protect small traders”.

Further, the AICPDF also sought a probe into the “operational models” of the quick commerce juggernauts, flagging potential violation of FDI norms.

The letter came days after Goyal accused ecommerce companies such as Amazon of predatory pricing and skirting FDI laws. The commerce minister said that Amazon is investing billions of dollars in India only to write off its losses.

Goyal further said that the exponential growth of ecommerce in the country is a “matter of concern” and not a “matter of pride”. However, he clarified that he was not “wishing away ecommerce” from the country but wants these platforms to operate fairly in the country.

This comes at a time when the demand for rapid delivery of daily essentials is on the rise in the country, especially in the metros. Further, a gold rush into the startups operating in the quick commerce segment has prompted even behemoths like Flipkart and Reliance to enter the space.

Blinkit continues to be a growth engine for Zomato, while its rival Zepto has secured fat cheques from investors in recent months. Meanwhile, Swiggy, which operates quick commerce platform Instamart, is gearing up for its public listing.

Recently, it was also reported that Tata Digital-owned BigBasket is pivoting from being an online grocery delivery platform to becoming a full-scale quick commerce platform.