FMCG distributors flag q-comm concerns in letter to govt

The All India Consumer Products Distributors Federation (AICPDF) has written to the ministry of commerce and industry, raising concerns about the rapid growth of the quick commerce market and the challenges it poses to traditional retail trade, particularly from players like Zomato-owned Blinkit, Zepto, and Swiggy Instamart.

In a letter sent on Friday, the AICPDF said that the “unchecked expansion” of quick commerce platforms could lead to “severe disruptions in the retail ecosystem”. The federation expressed concerns that the rise of quick commerce not only creates an uneven playing field but also threatens the livelihoods of millions of small retailers and distributors who have long been the backbone of India’s retail sector.

“The FDI rules clearly prohibit e-commerce entities operating under the marketplace model from holding inventory or exercising control over inventory sold on their platforms. However, it appears that these quick commerce platforms may be engaging in practices that blur the lines between a marketplace and an inventory-based model, potentially violating FDI norms,” the letter said.

The AICPDF’s concerns come in the wake of recent remarks by Union commerce and industry minister Piyush Goyal, who earlier this week expressed apprehensions about the surge in e-commerce business across the country. Although Goyal later clarified that the government does not intend to limit e-commerce, he emphasised the need for peaceful coexistence between offline retailers and online players.

In its letter, the distributors’ association urged the government to initiate an investigation into the operational models of q-commerce platforms to ensure compliance with FDI norms. The AICPDF also called for protective measures to safeguard the interests of small retailers and traditional distributors, and to prevent monopolistic practices. Additionally, the federation advocated for a dialogue between all stakeholders in the retail sector, including FMCG companies and quick commerce platforms, to establish fair and equitable business practices.