FMCG distributors body allege predatory pricing by Blinkit, Swiggy, Zepto

Retail distributors' body AICPDF has accused some quick commerce platforms of engaging in predatory pricing that leads to unfair competition with small retailers. The CCI will investigate the complain

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Indian retail distributors group, All India Consumer Products Distributors Federation (AICPDF) has lodged a formal complaint with the Competition Commission of India (CCI) against leading quick commerce platforms — Blinkit, Swiggy, and Zepto — alleging predatory pricing practices.
 

The AICPDF, which represents 400,000 retail distributors across India, including major players such as Nestle and Hindustan Unilever, expressed its grievances in a letter dated October 18. The federation claims that these companies are offering products at unsustainably low prices, undermining the competitive landscape for traditional retailers.

Allegations of predatory pricing

According to the complaint, quick commerce platforms are enticing customers through heavy discounts and selling goods below cost price, a strategy known as predatory pricing. This practice, the AICPDF argues, is detrimental to small retail businesses, which are unable to compete with such aggressive pricing, threatening their viability and the livelihoods of many small business owners.
 

The rapid rise of quick commerce, offering delivery services within 10 minutes or less, has revolutionised consumer shopping habits. However, the AICPDF highlights that these companies are bypassing the conventional distribution networks, forging direct ties with consumer goods manufacturers. This shift, the federation claims, is unfair to traditional distributors and retail outlets, further threatening their survival.
 

The letter stated, “Such practices make it impossible for traditional retailers to compete or survive.”

CCI to investigate the allegation

The CCI has initiated an investigation into the complaint, and if it finds sufficient evidence, it may take action against the accused companies. The outcome could have significant implications for the future of the quick commerce industry in India.
 

This complaint comes at a time when the quick commerce sector is booming. Zomato’s Blinkit has seen substantial gains, with Zomato's stock price doubling this year, and Swiggy is preparing for a high-profile IPO. However, these allegations of predatory pricing could cloud the outlook for the industry, raising questions about its long-term sustainability.
 

In a recent investigation, the Competition Commission of India’s investigative unit discovered that major e-commerce platforms, including Amazon and Flipkart, were involved in predatory pricing tactics that violated Indian laws. Both companies, however, have strongly denied these allegations.