Quick commerce is revolutionizing how consumers purchase everyday items. However, this rapid growth is also raising serious concerns among traditional FMCG (fast-moving consumer goods) distributors. In this article, we will explore the issues faced by these distributors, as they battle against the increasing dominance of quick commerce platforms.
What Is Quick Commerce?
Quick commerce, also known as q-com, refers to the ultra-fast delivery services offered by platforms that promise delivery of products within a few hours. While convenient for consumers, this model has disrupted the traditional FMCG distribution channels.
Challenges Faced by Traditional FMCG Distributors
Traditional FMCG distributors are struggling to compete with the speed and pricing strategies of quick commerce platforms. These platforms often engage in predatory pricing and deep discounting, which squeeze the margins of traditional retailers. As a result, many local distributors find it difficult to survive in this competitive environment.
Quick Commerce and Predatory Pricing
One of the major concerns raised by the All India Consumer Products Distributors Federation (AICPDF) is the predatory pricing adopted by quick commerce platforms. By offering deep discounts, these platforms attract customers away from traditional retailers. Over time, this practice can create monopolistic tendencies, leaving small retailers at a disadvantage.
Regulatory Issues Surrounding Quick Commerce
The AICPDF has flagged several regulatory concerns surrounding the quick commerce model. These platforms control large inventories through their dark stores, which, according to the distributors’ association, violate existing e-commerce regulations. This has led to calls for the Competition Commission of India (CCI) to investigate these practices more thoroughly.
The Role of Franchise Models in Quick Commerce
Additionally, many quick commerce platforms have expanded using franchise models. However, the AICPDF argues that these models lack transparency and often exploit franchisees due to the absence of a clear legal framework. The trade body has called for the creation of a Franchise Act in India, similar to that of the USA, to protect franchisees’ rights.
Request for Government Intervention
To address these issues, the AICPDF has urged the government to take action. They have requested the CCI to investigate the operational models of quick commerce platforms and protect traditional FMCG distributors. Additionally, they seek a dialogue between stakeholders, including FMCG companies, quick commerce platforms, and small retailers, to find a fair solution.
Conclusion: The Future of FMCG Distribution
Quick commerce is reshaping the retail landscape, but it has also introduced challenges for traditional distributors. As the debate continues, it is crucial that the government and industry stakeholders work together to create a level playing field. This will ensure that both quick commerce and traditional distribution models can thrive in the evolving market.
