In a significant move, the Commerce and Industry Ministry has referred the complaint from the FMCG distributors’ association, AICPDF, against ‘quick commerce firms’ to the Competition Commission of India (CCI).

The complaint has alleged anti-competitive practices by quick commerce platforms, and the competition watchdog is now set to take a call on investigating these claims, sources familiar with the development said. The Department for Promotion of Industry and Internal Trade (DPIIT) in the Commerce Ministry had referred this complaint to the CCI.

The latest Ministry move comes at a time when government officials are understood to have made enquiries with top e-commerce honchos to understand the ownership structure of quick commerce firms and how dark stores fit in their business model. 

Probe sought

Meanwhile, the All India Consumer Products Distributors’ Federation (AICPDF) is also looking at independently approaching CCI on the matter. 

Dhairyashil Patil, National President, AICPDF, told businessline: “We are approaching the Competition Commission of India for an investigation into the operational models of quick commerce companies. Their entire model is based on establishing dark stores where they control the inventory. Inventory-based e-commerce is not allowed in the country and hence we are calling for a review of their practices.”

The industry body wants a review of the operations of quick commerce platforms, emphasising the urgency of leveling the playing field to ensure fair competition. With the Commerce Ministry now officially referring the complaint to the CCI, the quick commerce platforms are under the lens.

In August, the AICPDF, which represents the FMCG distributors of the country, shot off a complaint to Commerce and Industry Minister Piyush Goyal, calling for an “immediate investigation” into the operational models of the quick commerce platforms which are “increasingly becoming direct distributors” for major FMCG companies. 

The body alleged that quick commerce firms, which deliver various products, including groceries, in 10-20 minutes — have an adverse impact on the kirana and traditional grocery stores, by creating an “uneven playing field”.

AICPDF’s concerns

The AICPDF’s concerns primarily revolve around dark stores, predatory pricing, and labour violations, which they claim are threatening the survival of traditional retailers.  It has alleged quick commerce companies, which operate through so-called dark stores, are bypassing inventory-based e-commerce regulations, creating a monopolistic ecosystem.

In India, foreign-funded online marketplaces cannot own inventory or control the sellers on their platforms. Due to this FDI stipulation, quick commerce firms operate on a structure where the Dark Stores (basically mini warehouses) are owned by separate Indian entities, legally controlled by Indian residents. 

Patil said there are lakhs of retailers of FMCG and grocery products in the country. The quick commerce firms are adversely impacting the foundation of traditional retail and creating a monopolistic ecosystem under the guise of convenience, he added.

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