Rapid, unchecked growth of quick commerce hurting millions of kiranas and small retailers: FMCG distributors’ body AICPDF to Piyush Goyal

An investor in the space previously told Moneycontrol that the companies do not paint an accurate picture because they want to avoid regulatory glare.

In its first major and formal statement on the ongoing tussle, the All India Consumer Products Distributors Federation (AICPDF) has urged Trade Minister Piyush Goyal to scrutinise the rapid and unregulated growth of quick commerce platforms such as Blinkit, Swiggy Instamart and Zepto.

The unchecked expansion of quick commerce platforms is creating an uneven playing field, undermining the viability of small mom-and-pop (kirana) stores that have long been the backbone of India’s retail sector, AICPDF said in its letter to Goyal.

“The livelihood of millions of small retailers and distributors is at stake due to the rapid and unchecked growth of quick commerce platforms. It is crucial that the government intervenes to ensure that the growth of e-commerce in India is balanced and does not come at the cost of traditional retail,” Dhairyashil Patil, National President, AICPDF, said in the letter.

Quick commerce, the sector has evolved from delivering basic groceries to now selling electronics, sports equipment and several other high value items, is booming in India and is already a $5-billion market. The exponential growth of e-commerce in the country is a “matter of concern” and not a “matter of pride” India’s trade minister Piyush Goyal had said earlier this week.

Goyal had however toned down his words the next day and said he is not against e-commerce but wants fair play, a sentiment that others in the country echo.

The comments from AICPDF are of particular importance because companies like Blinkit, Swiggy Instamart and Zepto have all unanimously denied they are growing at the cost of kiranas. They maintain that they’re eating into the share of e-commerce and modern retail.

However, an investor in the space previously told Moneycontrol that the companies do not paint an accurate picture because they want to avoid regulatory glare.

“If any of the companies go out on a limb and say they’re growing at the cost of kirana stores, they know they’ll draw regulatory glare. The kirana shop owners, and their union, is a big vote bank for the government, and if quick commerce companies upset these owners, the government will have to intervene. So, it’s just safer to say quick commerce is growing at the cost of ecommerce,” the investor had said earlier.

While the government has not explicitly mentioned anything on the quick commerce industry, insiders said that the government is observing the rapid delivery space and will take action if there is overstepping.

The space is becoming more prominent, too. While Blinkit, Swiggy Instamart, Zepto, Big Basket (BB Now), Flipkart Minutes are the key players now, other companies, like Ola Consumer, are in line to start operations. Even others like Amazon are looking for ways to enter the space.

As the space gets hotter, there will be intense competition especially with predatory pricing. The federation has also requested the implementation of protective measures for small retailers and traditional distributors to prevent monopolistic practices, the letter said.

“AICPDF has proposed the initiation of a dialogue between all stakeholders, including representatives from the retail sector, FMCG companies, and quick commerce platforms, to establish fair and equitable business practices,” it concluded.