Indian retailers are demanding action against popular quick commerce platforms like Swiggy Instamart, Blinkit, Zepto, and more.
But why is this action being taken, and what is the threat here?
Why Are Indian Retailers Demanding Action?
First a lightning session on the terms quick commerce, e-commerce, kirana retail stores, etc. Quick commerce is a sister branch of the e-commerce platform, where they are focused on fast delivery of products.
E-commerce platforms vary in this regard where they can take 24 hours to several days to deliver products, whereas quick commerce promises delivery within a few minutes to hours at most. Quick commerce companies in India include names like Zomato, Swiggy Instamart, Zepto, BigBasket, Blinkit, and such.
Kirana shops are small stores that have a limited amount of goods, mostly focusing on daily needs products, common grocery items, snacks and such. They cater to a much smaller pool of customers, with every colony or residential block having its own Kirana store.
Now, in recent news, the All India Consumer Products Distributors Federation (AICPDF) that is India’s biggest retail distributors group has come forward to file a formal complaint against these leading quick commerce platforms — Blinkit, Swiggy, and Zepto with the Competition Commission of India (CCI). They are mainly alleging against the predatory pricing practices used by these platforms.
The AICPDF has almost 400,000 retail distributors across India under it including names like Nestle and Hindustan Unilever. In a letter dated 18 October, the federation called out these companies, alleging them of pricing their products at unsustainably low prices, thus undermining the competitive landscape for traditional retailers.
The letter alleged that these platforms are using a strategy called predatory pricing where they are not only offering deep discounts but also selling goods lower than the cost price.
The letter also claimed that the quick commerce companies are directly interacting with consumer goods manufacturers instead of adhering to conventional distribution networks.
All of this threatens their livelihood and according to the letter “Such practices make it impossible for traditional retailers to compete or survive.”
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Quick Commerce Companies A Threat
This is not the first time that small retail owners or Kirana store owners have spoken out against quick commerce platforms and how they are putting unnecessary pressure on their businesses.
In a recent report by ET Retail, Karan Taurani of Elara Capital said “As per our checks, distributors on the ground are unable to recover dues from kirana stores due to the negative impact on kiranas by digital platforms; kirana stores are sitting with high levels of inventory and distributors are unable to receive money on time.”
A note by Elara Capital sheds light on how there are almost 15 million Kirana stores and 80 million trader-based stores in the country and all are facing threats from the quick commerce companies, even more than modern trade.
Earlier, the customer needs were split between modern trade, which focused more on customers wanting to bulk buy products, whereas Kirana stores filled the needs of customers looking for impulse purchases.
However, quick commerce platforms are now taking over that area, negatively impacting the Kirana store formats and cutting their profits.
Image Credits: Google Images
Sources: The Economic Times, Business Standard, Business Today
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This post is tagged under: Zepto, Blinkit, Swiggy, indian retailers, India retailers action, indian retailer distributor group, AICPDF, All India Consumer Products Distributors Federation, India commerce industry, grocery delivery company, amazon, flipkart
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