Blinkit and Zepto to come under CCI scrutiny following complaints from local retailers

New Delhi: India’s Department for Promotion of Industry and Internal Trade (DPIIT) has asked the Competition Commission of India (CCI) to investigate quick commerce platforms such as Blinkit and Zepto following complaints from local retailers, two people aware of the matter said. Mint anonymous.

The move comes after Indian Commerce Minister Piyush Goyal warned that e-commerce platforms could cause social disruption and that predatory pricing – a strategy where companies lower prices to gain market share before raising them again – could hurt local retailers.

One of the people mentioned above said that local retailers have accused fast-moving consumer goods delivery platforms of anti-competitive behavior, and the Indian Ministry of Industry and Information Technology has submitted the matter to the Competition Commission of India for review.

The person said the DPIIT believes that while the discounts are good for consumers, they hurt small businesses that cannot compete on price, ultimately leading to higher prices once competition decreases.

Although the Competition Commission of India does not regulate prices, it ensures that competition in the market is functioning properly.

We emailed the DPIIT secretary, CCI chairman and the commerce ministry spokesperson on Thursday, and Zepto and Blinkit on Friday morning, but received no response till the time of going to press.

“The letter from DPIIT to the CCI chairman highlighted complaints against fast-track business entities for engaging in anti-competitive marketing tactics,” said the second person aware of the development. “The letter states that these companies were allegedly signing exclusive agreements with certain suppliers, giving unfair advantage to particular suppliers and enabling them to dominate the market.”

India’s e-commerce industry is expected to reach $325 billion by 2030, largely driven by the country’s 881 million internet users. E-commerce is currently valued at $70 billion, or about 7% of India’s retail market, according to Invest India.

The CCI’s director general recently reported that Amazon Seller Services Private Ltd and Flipkart Internet Private Ltd had allegedly violated competition laws by offering deals, launching exclusive products and providing deep discounts to certain sellers. Both companies are now facing a case against them, Mint reported on September 12.

READ ALSO: Consumer goods company offers holiday incentives to gig workers

Swadeshi Jagaran Manch (SJM) national co-convener Ashwani Mahajan said in a MintIt has criticised the business model of e-commerce players, calling it a cash-burning model to grab market share by offering deep discounts, exploiting suppliers and undercutting prices.

“Exclusive launches of mobile phones and other products by e-commerce companies are anti-competitive practices that will further hurt smaller companies and disrupt the market,” Mahajan said.

Manish K. Shubhay, partner at Precept-Law Offices, said that during festive seasons or special events, e-commerce platforms offer deep discounts, which often disrupt the market and put offline retailers and small online entities at a disadvantage. “Such practices raise competition law concerns as they harm fair competition. It is important to address these issues to ensure a level playing field for all.”

Also read: Dunzo could have been Zepto. So why did it fail?