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The Competition Commission of India (CCI) is unlikely to open an investigation of its own accord into allegations of anti-competitive practices by quick commerce companies including Zepto, Instamart and Blinkit, according to two persons privy to the development.
Earlier, the All-India Consumer Products Distributors Federation (AICPDF) had approached the department for promotion of industry and internal trade (DPIIT) raising concerns about quick commerce firms, which was referred to CCI. The trade body also separately approached the CCI, expressing concerns and alleging preferential treatment and listing of certain sellers on these platforms and alleged deep discounting practices, Mint had reported on 25 October.
To order an investigation by its director general, CCI needed to make a first impression view about the existence of anti-competitive practices that warrants a closer look. However, the information shared with the regulator, has not led to such a view to trigger a probe, said one of the two persons quoted above.
“There are multiple players in the quick commerce sector that deliver ordered items quickly and efficiently and consumers are benefiting from a good deal. The sector is also fast growing, adding to the competitive forces in this segment. The CCI is unlikely to take suo moto action in this sector,” said the person, who spoke on condition of not being named.
Quick commerce faces scrutiny
The rapidly expanding quick commerce market in India is projected to reach $6 billion in annual sales by 2024, up from just $100 million in 2020, as per Datum Intelligence, a research firm.
This growth is driven by increasing demand for fast delivery services. By 2030, the sector is expected to grow to $40 billion, capturing a significant share of the retail market, the report highlighted.
Amazon India will launch a 15-minute delivery service in Bengaluru later this month, marking its entry into the rapidly growing quick-commerce sector, The Economic Times reported on 11 December quoting a company executive.
Emails sent on Tuesday to CCI, DPIIT, Zepto, Zomato, which owns Blinkit and Swiggy which houses Instamart on its platform, seeking comments for the story remained unanswered at the time of publishing.
AICPDF calls for CCI Action
AICPDF said in response to Mint’s queries that the view that quick commerce market is inherently competitive and efficient requires a deeper exploration of the concerns that the trade body has consistently highlighted.
“AICPDF firmly believes that while competition in the quick commerce sector benefits consumers, the current trajectory of these platforms threatens the existence of traditional retail. Predatory pricing, violation of labour laws, and inadequate FDI regulation enforcement are eroding the backbone of India’s retail ecosystem,” said the federation’s national president Dhairyashil Patil.
“We urge the CCI to proactively investigate these practices to ensure fair competition and safeguard traditional retail,” he said.
“Ignoring these concerns today could lead to monopolistic markets tomorrow, with adverse consequences for both consumers and distributors. AICPDF is committed to protecting the interests of 450,000 distributors and 13 million kirana stores, which play a pivotal role in India’s economy,” Patil said.
CCI’s view of not ordering a probe comes at a time the government is increasingly emphasising on how regulators must balance their priorities to ease the rigours of regulation.
Chief economic advisor V. Anantha Nageswaran said last month, while reacting to a slower than expected 5.4% economic growth rate in the September quarter, that it was a good moment to double down on deregulation. Nageswaran last week also cautioned against overregulation and said the right balance needed to be struck between optimizing growth and the regulatory framework.
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