Predatory Pricing by Q-Commerce Impacts Brand Value: AICPDF

New Delhi, Sep 25 (PTI) Deep discounting by quick commerce firms impact brand value, AICPDF told the FMCG industry, suggesting that they closely monitor and evaluate effects of these hyper delivery platforms, their distribution and retail networks.

In an open letter, All India Consumer Products Distributors Federation (AICPDF) asked FMCG companies to "ensure fair practices that do not alienate or undermine" their existing distributor and retail base.

"Over the past few months, we have observed an alarming trend of predatory pricing and deep discounting practices by quick commerce platforms," the association, which claims to be representing about eight lakh FMCG distributors, said.

These practices "not only undermine the integrity of the established distribution network but also erode brand value" by creating unrealistic consumer expectations around pricing, it said.

Moreover, "distributors and retailers are facing the brunt of these unfair pricing models" AICPDF said, asking FMCG companies to "intervene to regulate pricing strategies to protect the value of your brands".

Quick commerce platforms are those that typically deliver goods within 10-30 minutes.

Recently DPIIT, which comes under the commerce and industry ministry, has referred a complaint of alleged unfair business practices against quick commerce players to the Competition Commission.

The complaint was submitted AICPDF to the Union commerce and industry ministry.

In the letter, the federation has complained about alleged anti-competitive practices of quick commerce companies and has also sought an investigation.

The federation also plans to lodge a formal complaint with CCI against the quick commerce players for allegedly indulging in anti-competitive practices and seek a probe into their activities, Patil had told PTI earlier.

The rapid growth of quick commerce platforms like Blinkit, Zepto, and Swiggy's Instamart is posing significant challenges to the traditional retail sector and the established fast moving consumer goods (FMCG) distribution network, the federation had said.

The quick commerce market in India is currently valued about USD 5 billion.

In the quick commerce space, companies like Blinkit, Zepto, and Swiggy's Instamart have established a strong presence. Recently, ride-hailing player Ola also announced its entry into this segment.

In their June quarter earnings, several FMCG companies reported high double-digit growth in quick-commerce from online sales.

NielsenIQ (NIQ) in a report on Tuesday said quick commerce has emerged as a pivotal growth driver in grocery shopping as 31 per cent of online shoppers rely on instant delivery platforms and 39 per cent for their top-up purchases.

Among the popular categories, 42 per cent of shoppers use quick commerce for ready-to-eat meals and 45 per cent for salty snacks, according to the latest Shopper Trends Report by the data analytics firm.