Government flags competition concerns amid quick commerce surge: Sources
According to sources, the Consumer Affairs Ministry has voiced these concerns to the Ministry of Corporate Affairs (MCA), emphasizing fears that aggressive discounting and the proliferation of "dark stores" run by these quick commerce platforms might disrupt the competitive balance.
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The rapid expansion of quick commerce platforms such as Blinkit, Zepto, and Swiggy Instamart has raised significant competition concerns within the Consumer Affairs Ministry. Sources tell CNBC TV18 that the Ministry of Consumer Affairs is reportedly worried about the potential impact these platforms could have on small businesses and local kirana stores, which are vital to neighbourhood commerce in India.
According to sources, the Consumer Affairs Ministry has voiced these concerns to the Ministry of Corporate Affairs (MCA), emphasizing fears that aggressive discounting and the proliferation of "dark stores" run by these quick commerce platforms might disrupt the competitive balance. The Ministry is concerned that these practices could create an uneven playing field, threatening the survival of smaller retailers who struggle to compete with the financial and logistical advantages of these tech-driven companies.
The MCA has reportedly taken a different position, suggesting that these quick commerce players are not yet substantial enough to be regulated at least under the digital competition law and that the issue needs to be dealt with by consumers affairs ministry. "Unlike other countries, in India, competition law and that the issue needs to be dealt with by consumers affairs ministry. "Unlike other countries, in India, competition and consumer protection don't come under the same ministry," a senior government official said.
Earlier this week, Union Commerce Minister Piyush Goyal, described the rapid growth of e-commerce firms as a "matter of concern" rather than an achievement. Speaking at the launch of a report on the 'Net Impact of E-Commerce on Employment and Consumer Welfare in India,' Goyal questioned the potential social disruption that might result from this surge.
"Are we going to cause huge social disruption with this massive growth of e-commerce? I don't see it as a matter of pride that half our market may become part of the e-commerce network 10 years from now; it is a matter of concern,” Goyal remarked.
