CAIT writes to Piyush Goyal, seeks action against quick commerce firms

CAIT national president BC Bhartia accused quick commerce platforms like Zomato-owned Blinkit, Instamart (Swiggy), and Zepto of misusing funds received through foreign direct investment

The Confederation of All India Traders (CAIT) representing 70 million traders has written to Union Commerce Minister Piyush Goyal, drawing his attention to the alleged violations of laws and regulations by quick commerce (qcom) companies. 

 

In its letter, the CAIT alleged how these firms are misusing foreign investments to distort the country’s retail market, creating major threats to small shopkeepers. The CAIT had earlier released a white paper on this issue, a copy of which has also been sent to the minister. The organisation is now sending the white paper along with a letter to the chief ministers of all states.

 

 

CAIT President B C Bhartia accused qcom platforms such as Zomato-owned Blinkit, Instamart (Swiggy) and Zepto, of misusing funds received through foreign direct investment. He said these firms control suppliers, dominate inventory, and arbitrarily determine product prices. Their primary objective appears to be eliminating small neighbourhood grocery stores and taking over their markets, he said.   Like e-commerce majors, the CAIT alleged that these companies are using qcom to harm India’s retail sector. Such business strategies create an uneven playing field, which is making it nearly impossible for over 30 million small grocery shops across the country to survive, the CAIT said. CAIT Secretary General Praveen Khandelwal said these firms blatantly violate FDI policies and flout the Competition Act. 

 

CAIT Secretary General Shri Praveen Khandelwal strongly criticised quick commerce companies, accusing them of driving small retailers out of the market.  

He said these companies blatantly violate FDI policies and flout the Competition Act. 

 

“They seem to have little regard for Indian laws and regulations,” said Khandelwal.

 

Khandelwal also referred to recent remarks by Piyush Goyal, where he expressed concerns about quick commerce and suggested connecting such platforms with local kirana stores. 

 

Khandelwal announced plans to lead a delegation of traders to meet Goyal soon regarding this issue. Meanwhile, CAIT is organizing a two-day national seminar in Delhi on January 6-7 to discuss this and other pressing trade issues.

 

 Bhartia revealed that quick commerce companies have raised over Rs 54,000 crore through FDI but have neither invested in infrastructure nor created long-term assets. Instead,  he alleged that they have used these funds to cover business losses, control supply chains, and offer deep discounts through select vendors, which is highly objectionable. He pointed out that these companies have set up numerous dark stores across the country for supply, which is against the rules prohibiting them from establishing any kind of store.

 

Bhartia added that quick commerce companies make exclusive deals with select vendors, eliminating competition for independent retailers. He alleged that these players withhold vendor information from consumers, violating the Competition Act and consumer rights. 

 

These companies manipulate prices and control inventory through unilateral agreements, which adversely impact fair competition.

 

CAIT stated that the unchecked growth of these foreign-funded companies poses a significant threat to India’s small retail sector. The organization urged the government to enforce strict monitoring of quick commerce companies through consumer protection (e-commerce) rules and e-commerce policies. CAIT also demanded immediate steps to ensure these companies comply with laws and regulations.

 

Impact of Qcom on Kiranas

 

As consumer preferences shift towards the convenience of last-minute grocery deliveries, quick commerce companies are outpacing traditional retailers, with 46 per cent of consumers surveyed reporting a cut in purchases from Kirana shops, a report has said.

 

The quick commerce market size is expected to reach $40 billion by 2030, a jump from  $6.1 billion in 2024, according to the report by Datum Intelligence.

 

"Nearly half (46 per cent) of respondents report reduced spending at Kirana shops, indicating a shift in customer behavior towards quick commerce platforms," it noted.

 

Quick commerce refers to the delivery of consumer items in 10-30 minutes. Blinkit, Zepto, Swiggy Instamart, and Flipkart Minutes are among the top quick commerce platforms in India.

 

The quick commerce market is projected to capture approximately  $1.28 billion of Kirana sales by 2024, accounting for 21 per cent of total sales on these platforms, the report further said.

 

"Quick commerce's focus on speed and convenience aligns with consumers' needs for efficient, on-demand grocery shopping experiences plays a major role in the adoption of online grocery," it said.

 

The study said that around 75 per cent of online grocery buyers have increased their unplanned purchases in the past six months, with a majority of them spending over Rs 400 per order. With an average order value significantly higher than traditional stores, consumers are increasingly opting for the convenience and speed offered by these platforms, it said.

 

This shift is facilitated by the platforms' ability to provide competitive pricing by eliminating multiple intermediaries that traditional retail relies upon, the report observed.

 

In contrast, Kirana stores, which historically dominated the Indian grocery market, are now facing an existential threat. The report showed that over 82 per cent of consumers have shifted at least one-fourth of their grocery spending from Kirana stores to quick commerce platforms.

 

The report said quick commerce has witnessed an unprecedented pace of adoption, significantly influencing consumer behaviours across the retail ecosystem.

 

"It is projected to experience a 74 per cent growth in 2024, positioning it as the fastest-growing channel during the 2023-28 forecast period with a 48 per cent compound annual growth rate (CAGR)," the report said.

 

(With inputs from PTI)