By Aditya Kalra
NEW DELHI (Reuters) – India’s biggest group of retail distributors has asked the antitrust authority to investigate three quick commerce companies – Zomato’s Blinkit, Swiggy and Zepto – for alleged predatory pricing, a letter showed on Sunday.
Quick commerce is a new shopping rage in India, with companies promising deliveries of anything from groceries to electronics within 10 minutes, reshaping how Indians shop and challenging e-commerce giants such as Amazon (NASDAQ:AMZN).
In a letter dated Oct. 18, All India Consumer Products Distributors Federation (AICPDF), which represents 400,000 retail distributors of major companies including Nestle and Hindustan Unilever (LON:ULVR), told the antitrust body quick commerce firms were practising predatory pricing – or offering deep discounts and selling below cost to lure customers.
Zomato’s Blinkit, Zepto, and Swiggy, which runs the Instamart delivery service and is backed by SoftBank (TYO:9984), did not respond to Reuters queries.
The letter said several consumer goods companies were dealing directly with quick commerce firms to increase their reach, sidelining the traditional salespeople who for decades went from one shop to another to deliver orders.
Such practices make “it impossible for traditional retailers to compete or survive,” said the letter, which is not public but was seen by Reuters.
“Implement protective measures for traditional distributors and small retailers to safeguard their interests,” it urged the Competition Commission of India (CCI).
The CCI also did not respond to a query from Reuters and AICPDF declined to comment on its letter.
Annual sales on Indian quick commerce platforms are set to exceed $6 billion this year, with Blinkit having a nearly 40% market share, while Swiggy and Zepto around 30% each, research firm Datum Intelligence said.
The CCI has powers to initiate an investigation on its own if it find merit in complaints, a government official told Reuters on Sunday, asking not to be named because he was not authorised to speak publicly.
The CCI’s investigation unit in August found bigger e-commerce players, Amazon and Walmart (NYSE:WMT)’s Flipkart, breached local laws through predatory pricing, allegations the companies deny.
Reflecting the strength of the quick commerce sector, Zomato’s shares have doubled this year and Swiggy will in the coming weeks will launch its over $1 billion IPO.