New Delhi

The rapid rise of quick commerce in India has sparked significant concern among traditional retail distributors. The All India Consumer Products Distributors Federation (AICPDF), representing over 400,000 retail distributors, has formally requested an antitrust investigation into major players in the quick commerce sector, including Swiggy's Instamart, Zomato's Blinkit, and Zepto. This request highlights fears that these companies are engaging in predatory pricing practices that could undermine the viability of traditional retail operations as detailed in a report by Reuters.

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The AICPDF's letter to the Competition Commission of India (CCI), dated October 18, alleges that quick commerce firms are luring customers with deep discounts and prices below cost. This aggressive pricing strategy not only threatens the survival of local retailers but also disrupts long-established distribution networks. The letter asserts that many consumer goods companies are opting to partner directly with these quick commerce platforms instead of relying on traditional distributors, further marginalising them in the marketplace.

The impact of quick commerce on the retail landscape is profound. With annual sales projected to exceed $6 billion this year, companies like Blinkit command nearly 40 per cent of the market share, while both Swiggy and Zepto account for approximately 30 per cent each. These figures illustrate the rapid growth of this sector and its potential to reshape consumer shopping habits across India.

In its letter, AICPDF urged the CCI to implement protective measures for traditional distributors and small retailers to ensure their interests are safeguarded against these disruptive practices. The federation argues that without intervention, it will become increasingly difficult for traditional retailers to compete effectively.

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The CCI has previously demonstrated its willingness to investigate allegations of predatory pricing within the e-commerce sector. In August, it found that larger players like Amazon and Walmart's Flipkart had breached local laws through similar practices. However, both companies have denied these allegations.

As quick commerce continues to gain momentum in India, the stakes are high for all involved. Zomato's shares have doubled this year, reflecting investor confidence in the sector's growth potential. Additionally, Swiggy is preparing for an initial public offering (IPO) valued at over $1 billion in the coming weeks.

The AICPDF's call for an investigation underlines a growing discord between traditional retail distributors and emerging quick commerce platforms. As consumer preferences shift towards faster delivery options, the challenge will be finding a balance that allows both sectors to thrive without compromising fair competition.

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With the CCI now faced with this pressing issue, it remains to be seen how it will respond to these concerns and what measures may be implemented to protect traditional retailers from potential market distortions caused by aggressive pricing strategies in the quick commerce arena.