Antitrust Case Targets Zomato, Swiggy, and Zepto
Indian consumer products distributors have initiated an antitrust lawsuit against major fast-delivery companies Zomato, Swiggy, and Zepto, alleging unfair deep discounting practices. The All India Consumer Products Distributors Federation (AICPDF) is calling for a thorough investigation by the Competition Commission of India (CCI) into these practices, which they claim harm smaller retailers. This legal action comes amid growing scrutiny of pricing strategies in India’s booming e-commerce sector.
Allegations of Predatory Pricing
The AICPDF’s filing highlights what it describes as an alarming trend of predatory pricing and deep discounting by quick commerce platforms. These practices, according to the federation, create unfair pricing models that disadvantage local retailers. The complaint specifically targets Zomato’s Blinkit, Swiggy’s Instamart, and Zepto, questioning the methods used to distribute discounts. The federation represents around 400,000 distributors who supply products from major brands like Nestle and Unilever to millions of retail shops across India.
Last year, a separate investigation by the CCI found that Zomato and Swiggy’s food delivery services violated competition laws, adding further pressure on these companies. The current case could exacerbate their legal challenges, as the CCI is expected to review the allegations and may launch a detailed investigation, which could take several months to conclude.
Impact on Local Retailers
The rise of quick commerce has significantly altered consumer shopping habits. A recent survey indicated that 36% of quick commerce shoppers have reduced their visits to supermarkets, while 46% have cut back on purchases from small independent stores. The AICPDF argues that local brick-and-mortar shops cannot compete with the discounts offered by these fast-delivery giants, which has led to a decline in their sales.
For example, a Nescafe coffee jar that a small retailer buys for approximately 622 rupees ($7.14) is sold for just 514 rupees on Zepto, 577 rupees on Swiggy Instamart, and 625 rupees on Blinkit. Such pricing discrepancies raise concerns about the sustainability of local businesses in the face of aggressive discounting strategies employed by larger platforms.
Market Dynamics and Future Outlook
The quick commerce sector in India is projected to grow significantly, with estimates suggesting it could reach a value of $35 billion by 2030, up from just $200 million in 2021. Companies like Blinkit, Zepto, and Swiggy are leading this charge, with Blinkit holding a 40% market share and Zepto capturing 29%. Swiggy’s Instamart follows closely with a 26% share.
As these companies expand, they face increasing scrutiny not only from regulators but also from the local retailers who feel threatened by their pricing strategies. Industry leaders, including Mukesh Ambani, are also adopting similar fast-delivery models, intensifying competition in the market. The outcome of the AICPDF’s antitrust case could have significant implications for the future of quick commerce and the traditional retail landscape in India.
Observer Voice is the one stop site for National, International news, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.