Trouble For Quick Commerce Players? DPIIT Refers AICPDF Complaint To CCI

SUMMARY

AICPDF's national president Dhairyashil Patil told Inc42 that the DPIIT referred the complaint to the CCI as it found merit in some of the concerns raised by the federation

Patil said that the representatives of the AICPDF will also meet the officials of the CCI next week to formalise their complaint

In its letter to commerce minister Piyush Goyal dated August 21, the federation pointed out strategies like predatory pricing and deep discounting tactics employed by quick commerce players are hurting conventional retailers

The Department for Promotion of Industry and Internal Trade (DPIIT) has referred a complaint filed by the All India Consumer Products Distributors Federation (AICPDF) against quick commerce players to the Competition Commission of India.

Citing a source, news agency PTI reported that the complaint seeking an investigation into the business practices of quick commerce players has been forwarded by the DPIIT, which falls under the commerce ministry, to the antitrust regulator.

AICPDF’s national president Dhairyashil Patil told Inc42 that the DPIIT referred the complaint to the CCI as it found merit in some of the concerns raised by the federation, like predatory pricing and deep discounting tactics employed by quick commerce players.

Patil said that the representatives of the AICPDF will also meet the officials of the CCI next week to formalise their complaint.

It is pertinent to note that in a letter written to commerce minister Piyush Goyal on August 21, the retailer association said that the “unchecked” expansion of quick commerce platforms like Blinkit, Zepto, and Instamart is causing severe disruptions in the Indian retail ecosystem.

“Specifically, 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,” the letter read.

Last month, Goyal also criticised the Indian ecommerce industry, saying that their rapid growth is a matter of concern rather than 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.

Earlier this week, the finance minister Nirmala Sitharaman also took cognisance of the matter. On September 17, the FM said that the government will “give a serious thought” to safeguarding the interests of small traders and traders if predatory pricing tactics of quick commerce and ecommerce players impact their businesses.

The development comes at a time when the CCI is already scrutinising ecommerce players for alleged predatory pricing and other unfair practices. Earlier this month, it was reported that the CCI, in an internal report, found ecommerce majors Amazon India and Flipkart violated antitrust guidelines by giving preference to select sellers on their platforms.

The latest development also comes amid the increasing popularity of quick commerce. As a result, the space is seeing intense competition. Besides startups like Blinkit, Zepto, and Swiggy Instamart, the likes of BigBasket, JioMart, and Flipkart are also fighting to grab a big share of the rapidly growing market.