Complaint against qcom players: Distributors submit additional info to CCI

Distributors of fast-moving consumer goods (FMCG) have furnished additional information to the competition regulator to substantiate their allegations against quick-commerce players.

 

According to sources in the know, the Competition Commission of India (CCI), the regulatory watchdog, has asked quick-commerce players to submit answers to the allegations.

 

Distributors, through the All India Consumer Products Distributors Federation (AICPDF), have said Blinkit owns the highest share of the market with 40-45 per cent, followed by Zepto with 25-30 per cent, and Swiggy Instamart with 20-25 per cent, according to documents seen by Business Standard. 

 

“The dominance of these OPs (opposing parties; in this case, it is quick commerce companies), particularly Blinkit, creates a significant market power imbalance, enabling practices that contravene Section 4 of the Act (abuse of dominance) and predatory pricing.”

 

The additional information said quick-commerce companies had arrangements by which they had bundled delivery service with loyalty programmes or subscription models, which encouraged customers to purchase additional services to access discounts or priority delivery.

 

They cited the examples of Swiggy Instamart offering discounts through Swiggy One membership and Zomato giving promotions through its Zomato Gold membership. 

 

They also alleged quick-commerce companies had contracts with suppliers, and such deals often included prioritising stock allocations to their dark stores and reducing supplies to traditional trade.  

 

They also complained quick-commerce companies used location-based pricing, by which consumers would get different prices for the same product, depending on where they lived.

 

And, according to them, consumers ordering through an iPhone are charged higher than android users. 

 

Frequent buyers are allegedly offered lower discounts whereas new customers get higher.

 

Blinkit and Zepto, they said, offered discounts of 35-50 per cent, pricing products below what distributors offer. 

 

The AICPDF had filed a complaint with the CCI on behalf of its president, Dhairyashil Patil, against Blinkit, Zepto, and Instamart in March. 

 

A source had earlier told Business Standard the CCI had asked the distributors’ body for details on the relevant market share of each of the quick-commerce players in the FMCG sector. It had also sought clarity on whether the FMCG companies had any exclusive agreement for distribution.

 

The CCI, once it receives a formal complaint, can order an investigation if it is satisfied with the information shared. It also has the option to seek comments from the parties named in the complaint or the informant who has filed the complaint before ordering an investigation.  

 

Last year, distributors’ body wrote to the Ministry of Finance on fund utilisation and fund accumulation by quick-commerce companies and the deep discounting of goods on their platforms. 

 

In October last year, it had first written to the CCI on issues the traditional supply chain was facing owing to the rapid growth of quick commerce. The appointment of these platforms as direct distributors of FMCG items by several companies was one of the complaints.

 

The federation had written to the Food Safety & Standards Authority of India, which asked ecommerce and quick-commerce operators in the food business to ensure a minimum shelf life of 45 days before the expiry of products at the time of delivery to consumers.