FMCG distributors have raised concerns about the impact of the growth of quick-commerce segment on traditional retailers. The All India Consumer Products Distributors Federation (AICPDF) has written to Commerce Minister Piyush Goyal flagging concerns about the “rapid and unregulated” growth of the quick-commerce segment. The industry body has urged the Ministry to scrutinise the impact of quick-commerce platforms on the traditional retail sector. It has also asked for an investigation into the operational models of these platforms to ensure compliance with the country’s FDI norms.
“These platforms, while innovative, are significantly disrupting the traditional retail sector and Fast-Moving Consumer Goods (FMCG) distribution network in India,” it stated in its letter. The industry body added that by becoming “direct distributor” for major FMCG companies these platforms are sidelining traditional distributors and are threatening the livelihood of small retailers.
“The unchecked expansion of quick-commerce platforms is creating an uneven playing field, undermining the viability of small “mom-and-pop” stores that have long been the backbone of India’s retail sector,” the industry body added.
FDI compliance
“There are concerns regarding the compliance of these platforms with India’s Foreign Direct Investment (FDI) regulations. The AICPDF suspects that these platforms may be blurring the lines between the marketplace model and inventory-based model, potentially violating existing FDI norms,” it added.
The industry body of FMCG distributors has called for “an immediate investigation into the operational models of these platforms” to ensure they are operating within legal boundaries. It has also requested the implementation of protective measures for small retailers and traditional distributors to prevent monopolistic practices.
Dhairyashil Patil, national president of AICPDF, stated, “The livelihood of millions of small retailers and distributors is at stake due to the rapid and unchecked growth of quick-commerce platforms. It is crucial that the government intervenes to ensure that the growth of e-commerce in India is balanced and does not come at the cost of traditional retail.”
The FMCG industry has been witnessing strong double-digit growth in the quick-commerce platforms in recent times.