The fast commerce industry in India has revolutionized how people purchase daily necessities. Millions of customers are drawn to platforms like Zepto, Swiggy’s Instamart, and Zomato-owned Blinkit by the promise of delivery in minutes and significant savings. This quick change has, however, led to a heated conflict with small shops and established distributors, who allege that these platforms are using predatory pricing.
The Competition Commission of India (CCI) has received an antitrust action against these rapid commerce behemoths from the All India Consumer Products wholesalers Federation (AICPDF), which represents 400,000 wholesalers. According to the complaint, deep discounting methods are making the market unjust and preventing small merchants from competing.
Credits: Reuters
The Allegations: Deep Discounts and Market Manipulation
The AICPDF’s case argues that quick commerce firms are engaging in predatory pricing by offering products at significantly lower prices than what traditional retailers can afford. Their complaint highlights a pricing disparity between online platforms and brick-and-mortar stores:
- A Nescafe coffee jar that costs an independent retailer ₹622 is available on Zepto for ₹514, Swiggy Instamart for ₹577, and Blinkit for ₹625.
- Similar disparities exist across 25 products from major brands like Nestlé and Hindustan Unilever, according to the AICPDF’s filing.
- The federation warns that if such pricing trends continue unchecked, millions of small retailers across India could face losses or even shut down.
The Growing Power of Quick Commerce
The Indian quick commerce sector has exploded in recent years. According to Bernstein estimates, the market was valued at just $200 million in 2021 but is projected to reach $35 billion by 2030.
Currently, Blinkit dominates with a 40% market share and over 1,000 dark stores, followed by Zepto (29%) and Swiggy Instamart (26%). These companies leverage hyperlocal warehouses and deep data analytics to optimize inventory and pricing.
However, their rapid growth has come at a cost to traditional retail. A Datum Intelligence survey of 3,000 quick commerce shoppers found that:
- 36% had reduced shopping at supermarkets
- 46% had cut back on purchases from small independent stores
Regulatory Scrutiny: Will CCI Take Action?
The CCI has been cracking down on unfair trade practices in India’s e-commerce sector. In a similar case last year, the watchdog investigated Amazon and Walmart-owned Flipkart for allegedly favoring select sellers and engaging in predatory pricing.
If the CCI finds merit in the AICPDF’s case, it could order a full investigation into Blinkit, Swiggy Instamart, and Zepto. This process could take months, requiring these companies to justify their pricing strategies. If found guilty, they may face penalties, restrictions on discounts, or even forced changes to their business models.
What This Means for Zepto’s IPO Plans
Zepto, which raised funding at a $5 billion valuation last year, is preparing for an IPO. However, regulatory scrutiny could create hurdles for the company. Investors might become wary if there’s a risk of legal action or regulatory restrictions on pricing.
For Zomato and Swiggy, this case adds another layer of complexity. Their food delivery businesses are already under investigation by the CCI for competition law violations.
Mukesh Ambani and the Future of Quick Commerce
Even as these players battle allegations, Mukesh Ambani’s Reliance is entering the quick commerce race. With deep pockets and extensive retail networks, Reliance is likely to follow a similar pricing strategy, potentially intensifying the competition. Additionally, Amazon and Flipkart are experimenting with quick commerce in select areas, further heating up the market.
Conclusion: Will Regulation Level the Playing Field?
Shopping habits have been transformed by quick commerce, but small merchants are finding it difficult to keep up with its explosive growth. Platforms may be forced to reconsider their discounted tactics if the CCI chooses to look into the matter and implement regulations.
The conflict between India’s traditional retail environment and discount-driven fast commerce titans is still ongoing. The question yet stands: Will rapid commerce continue to upend India’s retail scene, or will laws help level the playing field?
