CAIT accuses quick commerce platforms of regulatory violations, urges government intervention

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The Confederation of All India Traders (CAIT) has accused quick commerce (QC) platforms like Blinkit, Instamart, Zepto, and Swiggy of undermining India’s retail economy through alleged regulatory violations.

In a white paper released on November 13, CAIT alleged that the said platforms are misusing Foreign Direct Investment (FDI) to dominate supply chains, control inventory, and fund predatory pricing tactics, creating an unfair environment for small retailers and pushing kirana stores out of business.

Speaking at a press conference, CAIT Secretary General and Chandni Chowk MP Praveen Khandelwal condemned QC platforms for allegedly using FDI to subsidise operational losses and engage in unfair market practices.

“These platforms are aggressively pushing small retailers out of the market,” Khandelwal said, adding that their strategies are making it difficult for the country’s 30 million kirana stores to compete.

The white paper further outlines how QC platforms, which have received over Rs 54,000 crores in FDI, allegedly failed to invest in infrastructure or long-term assets, instead using the funds to subsidise deep discounts and secure exclusive agreements with preferred sellers.

CAIT claimed these practices have allowed QC platforms to capture up to 30 percent of the market share once dominated by kirana stores.

The white paper also accuses QC platforms of restricting market access by securing exclusive deals with sellers, limiting competition and hindering the growth of independent retailers.

Additionally, CAIT alleged that the platforms use FDI-funded discounts to squeeze Kirana stores out of the market, thereby distorting market conditions and negatively impacting competition. Furthermore, they claimed that QC platforms lack transparency by omitting key seller information, preventing consumers from making informed decisions.

CAIT further accused QC platforms of bypassing FEMA guidelines by controlling inventory indirectly through their preferred sellers, in violation of FDI policies. “These platforms are circumventing FEMA regulations by controlling inventory through their sellers, which goes against the spirit of FDI laws,” said Brij Mohan Agrawal, National Chairman of CAIT.

In light of these alleged violations, CAIT has called for immediate regulatory intervention, urging the government to implement stricter oversight and ensure QC platforms operate under fair practices.

“Unchecked growth driven by foreign capital poses a significant threat to India’s small retail ecosystem,” the White Paper states. The trade body also welcomed Union Commerce Minister Piyush Goyal’s recent remarks, which aligned with the concerns raised by the trade body, underscoring the importance of ensuring fair practices by QC platforms and fostering alignment with local Kirana stores for faster deliveries.

"We fully support the minister's emphasis on aligning quick commerce platforms with Kirana stores for faster deliveries, but this must not come at the cost of traditional retail," Khandelwal added.

A survey by Datum Intelligence on November 13 revealed how quick commerce is expected to take away almost $1.28 billion in sales from traditional kirana stores  in 2024 alone. This shift reflects a notable change in consumer behavior, with nearly 46 percent of quick commerce buyers reducing their purchases from kiranas, signaling a clear preference for faster, more convenient digital alternatives.

Popular names like Zomato's Blinkit, Swiggy Instamart, Zepto, BigBasket and Jiomart, known for delivering products within minutes, are rapidly becoming primary online retail channels, with 67 percent of kirana stores reporting a drop in sales since the emergence of quick commerce.