B2B e-commerce unicorn Udaan has filed a complaint against Parle Products Private Limited before the Competition Commission of India, alleging that Parle has abused its dominant position by refusing to supply their fast-moving products directly to Udaan, without any objective justification.
Parle is a dominant player in the market for glucose biscuits in India, and its Parle-G biscuit is a ‘must-stock’ item for small and medium retailers and also the platforms such as Udaan. According to the complaint, Udaan has to purchase Parle products from the open market causing a competitive disadvantage compared to other existing distributors of Parle, who could directly procure biscuits from Parle.
‘Decreasing competitiveness’
“This results in decreasing competitiveness and increasing input-costs for Udaan, and hence, the small retailers who procure products from Udaan,” the compliant added.
It has been argued that Parle’s continued refusal to supply Parle-G SKUs to udaan makes it a clear case of refusal to deal and thus, is an abuse of dominance under Section 4(2) of the Act. Further, the selective course of agreement of Parle with selected distributors and denial to deal with Udaan directly and forcing it to buy products from Parle’s distributors in the open market, is a case of ‘constructive refusal to deal’ and anti-competitive in terms of Section 3(4) of the Act having appreciable adverse effect on competition in India.
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Udaan is said to have tried engaging with Parle for the last 24 months to work this out in a “fair and justified” manner but the situation has not changed.
An Udaan spokesperson declined to comment on this complaint.
Udaan focusses on providing small and medium enterprises (SMEs) with transparent pricing, a wide variety of products, selling and trading in products across multiple categories including lifestyle, electronics, home and kitchen, staples, fruits and vegetables, FMCG, pharma, toys and general merchandise.
Udaan enables small manufacturers, farmers and brands to market and sell their products across the country. While doing so, it enables shopkeepers, kirana owners, restaurants, street vendors, chemists, offices, small factories, contractors etc. to source from a large selection of high-quality products at the best prices with the convenience of e-commerce.
In the B2B market, the company competes with retailers such as Metro Cash and Carry, Reliance and Flipkart Wholesale among others. Over the last 12-18 months, Udaan has invested more than ₹4,000 crore across technology, supply chain, and other areas. The company has been targeting a 100 percent year on year growth this financial year. In January 2021, the B2B commerce company had raised $280 million funding from its existing investors.