Distributors of fast-moving consumer goods (FMCG) have raised several issues regarding the quick commerce giants, including Blinkit, Zepto and Swiggy Instamart, with the Competition Commission of India (CCI). In a fresh complaint, the distributors have alleged that the increasing dominance of these giants is creating a market power imbalance, the Business Standard reported.
“The dominance of these OPs [opposing parties; in this case, it is quick commerce companies], particularly Blinkit, creates a significant market power imbalance, enabling practices that contravene Section 4 of the Act [abuse of dominance] and predatory pricing,” BS reported, citing a source.
FMCG distributors via the All-India Consumer Products Distributors Federation (AICPDF) reportedly told the regulator that Blinkit commands the highest market share with 40-45% and is followed by Zepto and Swiggy Instamart with 25-30% and 20-25%, respectively.
Allegations Against Quick-Commerce Cos
The distributors have highlighted several ways in which the quick-commerce players are increasing their dominance, including loyalty programmes or subscription models, which act as a motivation for customers to purchase additional services to access discounts or priority delivery. They also alleged that these players have contracts with suppliers which would include terms like more stock storage in their dark store than the traditional route. They raised concerns about the location-based pricing method used by giants due to which the same product would be available to the customer at different prices depending on his location. Additionally, the prices for the same product would differ for an Android user when compared with an iOS customer. An iPhone user would be charged higher for the same product. New customers using these platforms would get higher benefits as compared to older ones. Platforms like Blinkit and Zepto would offer discounts of 35-50% and pricing significantly below that offered by FMCG distributors.
Similar Tale of Kirana Stores
The move by the traditional FMCG distributors has come around a time when similar concerns have been raised by kirana stores, who have also flagged that their market share is decreasing due to the rise of quick-commerce companies. Kirana stores’ market share decreased from 95% in 2018 to 92.6% in 2023 and is estimated to further drop to 88.9% by 2028, the Economic Times reported, citing a study by Datum. Fueled by digital acceleration, the quick commerce grocery market is expected to grow threefold between 2024 and 2027, reaching about ₹ 1.5 lakh crore to ₹ 1.7 lakh crore, according to a study by management consulting firm Kearney.
