The All India Consumer Products Distributors Federation (AICPDF) has on Wednesday raised serious concerns regarding the pricing strategies and financial practices of quick commerce platforms such as Zepto and claimed that is threatening the survival of millions of small Kirana stores across India.
“A comparison of product prices on Zepto with those sold by Kirana stores highlight an alarming trend. Many packaged items are being sold on Zepto at discounts of up to 25 per cent below the Maximum Retail Price (MRP). Even if Kirana stores attempt to offer competitive discounts of 10-15 per cent, they are unable to match the aggressive pricing strategies of these platforms. This is leading to a loss of business for small retailers, who form the backbone of India’s traditional retail economy,” the FMCG distributors body stated.
Referring to media reports in which Zepto has denied allegations of predatory pricing, the distributors body said the ground reality for small retailers tells a different story. The inability of Kirana stores to compete with these platforms is causing widespread distress in the traditional retail sector.
AICPDF has also raised questions about the ownership structure of Zepto and similar platforms, calling it a “systematic plan to divert attention from their reliance on foreign funding”.
Dhairyashil Patil, National President of AICPDF, said, “This tactic is a clear ploy to portray themselves as an Indian company while reaping the majority of benefits for foreign stakeholders. Can’t the government see through this strategy? The stakes are too high to ignore, with $7 billion of foreign holdings translating into a $6 billion net loss for India and countless small retailers being forced out of business.”
P. M. Ganeshraam, Chief Patron AICPDF, stated: The quick commerce platforms are not just disrupting the traditional retail ecosystem but are also employing tactics that appear to mislead the public and policymakers. With 70 per cent of their ownership slated to be held by foreign investors, it’s evident that the narrative of being an ‘Indian company’ is a façade. This is a systematic strategy to divert attention while eroding the backbone of India’s small retail sector.
The body has urged the government to investigate the pricing practices of quick commerce platforms and enforce measures to prevent predatory pricing and review the ownership structure of these companies.