The All India Consumer Products Distributors Federation, in a letter to union minister Piyush Goyal, flagged “serious concerns” over compliance of such platforms with FDI norms
Calling for regulating the quick commerce space, the AICPDF said that the unchecked expansion of these platforms is undermining the viability of small brick and mortar stores
This comes days after Goyal said that the exponential growth of ecommerce in the country is a “matter of concern” and not a “matter of pride”
Amid the ongoing debate over “predatory pricing policies” of ecommerce platforms, retailer association All India Consumer Products Distributors Federation (AICPDF) has written to union commerce minister Piyush Goyal to scrutinise the “rapid growth” of quick commerce platforms such as Blinkit, Zepto and Swiggy Instamart.
Calling for regulating the quick commerce space to “protect small traders”, the body said that the unchecked expansion of quick commerce platforms is creating an uneven playing field and undermining the viability of small brick and mortar stores.
The AICPDF also claimed that FMCG companies are increasingly appointing quick commerce platforms as their distributors, leading to a disruption in the traditional retail ecosystem. Training guns at these players, the federation said that the unchecked expansion of these platforms is leading to the “erosion” of small mom-and-pop stores.
The retailer body also flagged “serious concerns” over compliance of such platforms with the foreign direct investment (FDI) norms.
“… FDI rules clearly prohibit ecommerce platforms operating under the marketplace model from holding inventory or exercising control over the inventory sold on their platforms. However, it appears that these quick commerce platforms may be engaging in practices that blur the line between a marketplace and inventory-based model, potentially violating FDI norms,” it said in the letter.
The body further alleged that these platforms are creating an uneven playing field and “threatening” the livelihoods of millions of small retailers and distributors.
Owing to these factors, it urged Goyal to initiate a probe into the “operational models” of quick commerce platforms to ensure they comply with existing FDI rules. Additionally, the AICPDF also sought “protective measures” to safeguard the interests of retailers and distributors and prevent monopolistic policies.
It also called on the Centre to facilitate a dialogue between representatives of the retail sector, FMCG companies and quick commerce platforms to formulate “fair and equitable” business practices.
The letter comes just days after Goyal said that the exponential growth of ecommerce in the country is a “matter of concern” and not a “matter of pride”. However, a day later, he clarified that he is not against ecommerce but wants these platforms to operate fairly in the country.
This comes at a time when quick commerce continues to see rapid adoption across the country, especially in the metros. The segment has scaled up aggressively in the past few years and even forced ecommerce giant Flipkart to launch quick commerce vertical, Minutes, recently.
While Blinkit has emerged as the growth engine of parent and foodtech major Zomato, competitor Zepto has raised big amounts of capital in recent months. Meanwhile, Instamart parent Swiggy is also looking to list on the bourses in coming months.
Additionally, Ola Consumer too has bolstered its foodtech pitch and has partnered with ONDC to make a splash in the growing space.
As per a report, the Indian quick commerce market is projected to reach a size of $9.9 Bn by 2029.
