‘Blinkit, Swiggy, Zepto Involved In Predatory Pricing,’ Allege Retail Distributers, Seek Probe

Mumbai: A group representing hundreds of thousands of retail distributors in India has accused some of the leading quick commerce companies like Zomato 's Blinkit, Swiggy, and Zepto of engaging in predatory pricing. In a letter to the country's antitrust authority, the All India Consumer Products Distributors Federation (AICPDF) alleged that these companies are offering deep discounts and selling below cost to gain market share and drive traditional retailers out of business.

What is Quick commerce?

Quick commerce, which promises delivery of goods within minutes, has gained significant traction in India. However, the AICPDF argues that the aggressive pricing tactics employed by quick commerce firms are harming traditional retailers who have long served as intermediaries between manufacturers and consumers.

Predatory Pricing

Predatory pricing is a business strategy where a company sets a very low price for its products or services with the intent to drive competitors out of business. Once the competition is eliminated, the company can raise prices to recoup its losses and enjoy higher profits.

The letter also highlighted concerns about the direct relationships that consumer goods companies are forming with quick commerce firms, bypassing traditional distributors. This practice, according to the AICPDF, is making it difficult for traditional retailers to compete and survive.

The Competition Commission of India (CCI), the country's antitrust regulator, has not yet responded to the allegations. However, the CCI has the power to initiate its own investigation if it finds merit in the complaints.

The quick commerce market in India is expected to reach $6 billion this year, with Blinkit, Swiggy, and Zepto being the major players. The CCI's investigation into predatory pricing by e-commerce giants Amazon and Flipkart earlier this year could set a precedent for how the regulator will handle similar allegations against quick commerce companies.