AICPDF warns of livelihood loss for 80 million retailers due to quick commerce practices

The All India Consumer Products Distributors Federation (AICPDF) has raised concerns over the rising accumulation of funds and predatory pricing strategies employed by quick commerce platforms in a letter to the Finance Ministry. The federation's analysis, based on reports of Zepto's efforts to raise $300 million after securing $1 billion in recent funding rounds, highlighted that a significant portion of this capital, over 80%, was being used for unsustainable customer acquisition strategies rather than fostering innovation or sustainable growth in the retail sector.

Impact on traditional retailers

The AICPDF claims that heavily subsidised pricing by platforms like Zepto, Instamart, and Blinkit is threatening the livelihoods of 80 million traditional retailers, reducing entrepreneurial opportunities for small businesses. Additionally, the Confederation of All India Traders (CAIT) has accused these platforms of misusing foreign direct investment (FDI) to fund deep discounting practices, which have resulted in significant revenue loss for Kirana stores, with quick commerce capturing 25-30% of the business traditionally handled by these stores.

AICPDF's call for action

In its letter, the AICPDF urged the government to halt new or ongoing investments in quick commerce platforms until the Competition Commission of India (CCI) and other authorities complete investigations into FDI regulations and compliance with labour laws. The federation also called for audits of the funds raised by such companies, greater encouragement for ethical investments, and the creation of regulatory frameworks to protect small retailers. Furthermore, the AICPDF requested action against quick commerce platforms operating dark stores and bypassing government regulations on inventory-based e-commerce.

Concerns over food safety and labour practices

The AICPDF's concerns also extend to food safety violations and labour practices within the quick commerce ecosystem. Earlier, the Food Safety and Standards Authority of India (FSSAI) intervened, ensuring that food products delivered by e-commerce and quick-commerce platforms have a minimum shelf life of 30% or 45 days before expiry. Meanwhile, the Central Consumer Protection Authority has been investigating the '10 minutes or less' delivery time claims made by these platforms.

The AICPDF’s concerns regarding FDI violations, predatory pricing, and labour practices reflect broader tensions between quick commerce companies and traditional retail distributors. As investigations by the CCI and other bodies progress, the federation continues to call for stronger safeguards to ensure fair competition and protect small retailers from the growing influence of these fast-growing platforms.