Quick commerce represents a "one-of-a-kind innovation" that can be leveraged internationally to brand India as the destination for inventive solutions, Finance Minister Nirmala Sitharaman said while also acknowledging the challenges such platforms pose for traditional Kirana stores.
"India's businesses, particularly the startups, especially the quick commerce for instance are truly one of a kind innovation that only India has. But that's not to say the brick and mortar retail is not doing fine, they are being challenged, I recognise that," she said at an event on November 22.
Sitharaman added that, "we need to hand hold and support our brick and mortar retail. No doubt. But use this (quick commerce) to brand India as a destination of innovative solutions to modern, urban needs. This will serve as an incentive to scale up internationally."
Her comments on this matter come at a time when there has been an intense debate around the impact of the rapid expansion of quick-commerce platforms on India's brick and mortar retail stores.
In fact, a recent survey conducted by Datum Intelligence suggests that $1.28 billion in sales is expected to shift from traditional kirana stores to quick commerce platforms in 2024 alone.
Popular names such Blinkit, Instamart, Zepto and BigBasket, which are known for delivering products within minutes, are rapidly becoming primary online retail channels. Around 67 percent of kirana stores reported a drop in sales since the emergence of these platforms, the survey showed.
On November 19, Commerce and Industry minister Piyush Goyal asked e-commerce companies to respect the law of the land, both in letter and in spirit. He was referring to the norms around foreign direct investment (FDI) in India.
The Confederation of All India Traders (CAIT) recently released a white paper, accusing quick-commerce players such as Blinkit, Instamart and Zepto of plotting against kirana stores.
The traders’ body issued blamed these platforms for misusing FDI norms and offering deep discounts to cover their growing operating losses.
At present, FDI is prohibited for e-commerce in multi-brand retail in the inventory-based model or multi-brand retailing. It is allowed when an entity can provide a platform for third-party buyers and sellers to come together and trade goods. However, it cannot buy, keep an inventory and also sell goods.
Separately, Sitharaman pitched for India's own Food and Drug Administration (FDA) that could set global benchmarks for pharmaceutical products.
"...You don't need a US FDA standard. You may take it very well because that helps you with exports. But, can we in India not have a Bharat FDA," she said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
