Indian distributors have accused quick commerce platforms of alleged FDI norm violations and have raised concerns about their impact on traditional retail.
The All India Consumer Products Distributors Federation has written to the antitrust regulator, the Competition Commission of India (CCI), requesting a probe into the operational models of quick commerce platforms Blinkit, Swiggy Instamart, and Zepto.
AICPDF urged CCI to investigate whether these platforms are in compliance with India’s FDI norms. The FMCG distributor body also called for protective measures to safeguard traditional distributors and small retailers, while proposing a dialogue between FMCG companies, quick commerce platforms, traditional distributors, and small retailers.
AICPDF expressed concern over the rapid expansion of these platforms, claiming it poses significant challenges for traditional retail. One key issue raised is the practice of FMCG companies appointing quick commerce platforms as direct distributors.
This, the letter argues, sidelines traditional distributors and threatens the livelihoods of small mom-and-pop stores, thereby disrupting the established FMCG distribution ecosystem.
The AICPDF’s letter to CCI also raises concerns about the operational models of these platforms, echoing similar issues AICPDF highlighted in an earlier communication to the Commerce Ministry.
A particular point of contention is the use of "dark stores" (centralised warehouses), which AICPDF claims blur the distinction between marketplace and inventory-based models. This could potentially violate FDI regulations, which prohibit marketplace entities from holding or controlling inventory.
AICPDF also expressed concerns about predatory pricing, stating that such practices lead to unfair competition, making it nearly impossible for traditional retailers to compete or survive.
Representing 400,000 dealers, distributors, and stockists of various FMCG companies across India, AICPDF has previously raised these concerns with the Ministry of Consumer Affairs and Commerce Minister Piyush Goyal.
Source: CNBC-TV18
