Blinkit, Swiggy, & Zepto: Retailers Accuse of Unfair Business Practice

Many people's shopping habits have been altered by India's rapid commerce industry, which provides the convenience of having necessities and food delivered in minutes. However, conventional players are now concerned about this quick rise. The massive rapid commerce companies Blinkit, Swiggy, and Zepto have recently come under fire from the All India Consumer Products Wholesalers Federation (AICPDF), which represents 4,000 retail wholesalers.

Blinkit, Swiggy, and Zepto: Unethical business practices and anti-competitive behaviour

Concerns about what they see as unethical business practices and anti-competitive behaviour have led Indian retail groups to urge action against Blinkit, Swiggy, and Zepto recently. Predatory pricing, in which these businesses are accused of selling goods below cost (a loss-leading strategy) to gain market share and undercut established retailers who cannot match such cheap costs, is one of the main problems. They contend that this results in an unfair advantage jeopardising small and local firms' survival capacity. The retail associations are also concerned about preferential treatment, such as better terms or faster deliveries, and anti-competitive tactics, such as exclusive relationships with suppliers, which may restrict product availability to traditional stores. These strategies significantly affect businesses, reducing profitability and maybe causing some stores to close, which could mean job losses. Although low costs may appeal to customers in the short run, they are worried about having fewer options and the possibility of future price increases if competition is reduced. The retail associations call for regulatory action to resolve these problems and guarantee an equal competition environment.

AICPDF asked the Competition Commission of India (CCI) to look against these businesses.

AICPDF asked the Competition Commission of India (CCI) to look against these businesses for allegedly using predatory pricing in a letter dated 18 October. The phrase describes tactics used by companies to draw in additional clients by offering goods at steep discounts, frequently below cost. AICPDF claims that in addition to drawing customers, this strategy upends the established distribution networks that conventional shops depend on. According to the letter, which Reuters obtained, such actions make "it impossible for traditional retailers to compete or survive," In its letter, AICPDF emphasised the necessity of protective measures and urged CCI to protect small retailers' and conventional distributors' interests.

The federation emphasised how many consumer goods businesses are working directly with rapid commerce startups, eschewing the traditional salespeople who have been supplying local retailers around India with items for decades. India's rapid commerce business has grown significantly; this year's sales are predicted to surpass $6 billion. According to research firm Datum Intelligence, Blinkit has a nearly 40% market share, while Swiggy and Zepto hold about 30%. The stock market has also seen this trend, as Zomato, the parent business of Blinkit, has seen a twofold increase in share price this year. Although Amazon and Flipkart refuted the accusations, the CCI's investigation team discovered in August that these e-commerce behemoths used predatory pricing. According to a government official, if the CCI determines that the AICPDF's complaint has enough merit, it may investigate fast commerce. The resolution of this complaint may change the way Indian e-commerce firms function.

In the context of these worries, Indian retail associations are calling on the government to step in and stop Blinkit, Swiggy, and Zepto's unfair business practices. They think taking steps like antitrust investigations might prevent anti-competitive practices, ensuring everyone competes pretty. Retail associations also push for price control to stop unfair pricing strategies that may otherwise hurt standard shops. Tax reforms are also being proposed to balance the competitive dynamics between the two groups and ensure that traders and e-commerce businesses are subject to fair financial requirements. Although these ideas encourage fair competition, how the government will react to the demands for action and what measures will be implemented to deal with these problems are still being determined.