Kirana Stores Challenge Quick-Commerce Giants
Kirana stores and FMCG distributors have formally requested an investigation into the alleged anti-competitive practices of quick-commerce platforms such as Swiggy Instamart, Zepto, and Blinkit. The All India Consumer Products Distributors Federation (AICPDF), representing small retail businesses, submitted a petition to the Competition Commission of India (CCI) on February 28. The federation claims that these platforms are engaging in deep discounting and predatory pricing, which they argue is driving small retailers out of business.
Allegations of Predatory Pricing
The AICPDF’s petition highlights concerns that quick-commerce platforms are leveraging their financial strength to engage in practices that harm competition. The federation asserts that these companies are deliberately incurring losses through aggressive pricing strategies, making it impossible for small retailers to compete. This situation has led to significant financial strain on traditional distributors, who are unable to match the discounts offered by these platforms. Additionally, the AICPDF points out that quick-commerce platforms often provide introductory offers and substantial discounts to attract new customers, further exacerbating the challenges faced by small retailers. The federation has previously raised similar concerns, having sent a letter to the CCI in October through the Ministry of Commerce. However, this recent petition marks a direct approach to the regulatory body.
The Rise of Quick Commerce
Quick commerce, characterized by rapid delivery services, has seen explosive growth, particularly in metropolitan areas. Initially focused on grocery delivery, these platforms have expanded their offerings to include a wide range of products, from electronics to apparel. A recent survey by Datum Intelligence revealed that approximately 82% of consumers have shifted at least 25% of their kirana purchases to quick-commerce platforms, indicating a significant shift in consumer behavior. Investor interest in quick commerce has surged, with companies like Zepto securing $1.2 billion in funding last year, even amid a challenging market. As these platforms continue to thrive, they are becoming increasingly attractive to brands seeking new distribution channels, further complicating the landscape for traditional retailers.
Impact on Traditional Retailers
The rapid growth of quick-commerce platforms poses a serious threat to offline retailers, who are already grappling with the challenges posed by online commerce. The AICPDF warns that the aggressive expansion of quick commerce is leading to the closure of millions of retail shops and distributors across the country. Moreover, the National Restaurant Association of India (NRAI) is pursuing a separate legal case against 10-minute food delivery services operated by Zomato and Swiggy, highlighting the broader concerns within the industry regarding the impact of quick commerce on traditional business models. As the competition intensifies, the future of small retailers hangs in the balance, prompting urgent calls for regulatory intervention.
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