Blinkit and Zomato logos are seen in this illustration taken on June 27, 2022.
Dado Ruvic | Reuters
India’s largest retail distribution group has asked antitrust authorities to investigate three fast-paced trading companies – Zomato Blinkit, Swiggy and Zepto – due to alleged predatory pricing, a letter was presented on Sunday.
Instant commerce is the new shopping rage in India, with companies promising delivery of anything from groceries to electronics within 10 minutes, reinventing how Indians shop and challenging e-commerce giants such as Amazon.
In a letter dated October 18, the All India Consumer Products Distributors Federation, which represents 400,000 retail distributors of major companies including Nestle and Hindustan Unileverto the antitrust body fast trading companies were practicing predatory pricing – or offering deep discounts and selling below cost to lure customers.
Blinkit, Zepto, and Swiggy Zomato, which runs delivery service Instamart and is backed by SoftBank, did not respond to Reuters queries.
The letter said some consumer goods companies are dealing directly with fast-track companies to increase their reach, bypassing traditional sellers who have spent decades going from store to store to deliver orders.
The practice makes it “impossible for traditional retailers to compete or survive,” said the letter, which is not public but was seen by Reuters.
“Implement protection measures for traditional distributors and small retailers to safeguard their interests,” said the Competition Commission of India.
The CCI also did not respond to queries from Reuters and the AICPDF declined to comment on the letter.
Annual sales on India’s instant trading platform are set to surpass $6 billion this year, with Blinkit having a market share of nearly 40%, while Swiggy and Zepto have around 30% each, research firm Datum Intelligence said.
The CCI has the authority to launch its own investigation if it finds complaints, a government official told Reuters on Sunday, asking not to be named because he was not authorized to speak publicly.
The CCI investigation unit in August found the bigger e-commerce players, Amazon and Walmart’s Flipkart, violated local laws through predatory pricing, an allegation the company denies.
Reflecting the strength of the e-commerce sector, Zomato’s stock has doubled this year and Swiggy is set to launch an IPO of more than $1 billion in the next few weeks.
