FMCG distributors call for scrutiny of quick commerce platforms amid rapid growth

Call for scrutiny: FMCG distributors raised serious concerns over the swifter and unregulated expansion of the quick commerce platform. They now want the government to probe these companies. The All India Consumer Products Distributors Federation has written to the Commerce & Industry Minister Piyush Goyal, warning that if these platforms are allowed to grow unchecked, then an "uneven playing field" is being created in the sector, jeopardizing millions of small retailers and traditional distributors, who have all been part of the mainstay of India's retail sector until now.

AICPDF said in its letter, "Quick commerce platforms, promising delivery within 10-30 minutes, are shaking up the traditional retail landscape. This is borne out by the growing popularity of Blinkit, Zepto and Instamart among others who are increasingly getting direct appointments from large FMCG companies sidelining the traditional distribution network.".

AICPDF also pointed out probable violations of FDI norms by these instant Commerce companies. The federation believes that some of these platforms may, in reality, be straddling the marketplace and the inventory-based models and may be breaching the existing FDI norms. Current norms bar e-commerce companies with marketplace models from maintaining any inventory or influencing the sale of goods. AICPDF has demanded an immediate probe into the business practices of these companies regarding compliance with the rules and regulations of FDI.

Urging the government to implement protection measures to protect small retailers and traditional distributors from alleged monopolistic practices, the federation demanded open communication among all stakeholders, including representatives from the retail sector, FMCG companies, and quick commerce platforms, to determine fair business practices.

AICPDF took cognizance of the recent statement of Minister Goyal that criticized e-commerce companies for their actions against small retailers. Goyal had asked a question regarding Amazon's declaration of investing $1 billion in India and cited that substantial losses the company was facing in the country hinted at predatory pricing strategies that could harm small businesses.

The quick-commerce market in India stands at roughly $5 billion, and riding on the back of these platforms were a good number of FMCG companies that posted a strong growth in e-commerce sales. Joining established players such as Blinkit, Zepto, Swiggy's Instamart, Ola—in the league of the leading ride-hailing company—has also announced its foray into the realm of quick commerce.