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Policy · Commerce & Consumer Brands

Blinkit and Zepto face CCI scrutiny over anti-competitive practices

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Date
Company
Blinkit
What it does
quick commerce delivery service
Kind
Policy
Sector
Commerce & Consumer Brands

What they do

Blinkit, a quick commerce delivery service, is under investigation by the Competition Commission of India (CCI) for alleged anti-competitive practices

What happened

The Department for Promotion of Industry and Internal Trade (DPIIT) has asked the CCI to probe Blinkit and Zepto after complaints from local retailers

Why it matters

Retailers claim Blinkit and Zepto use exclusive supplier agreements and deep discounts to unfairly dominate the market

The details

  • Blinkit, a quick commerce delivery service, is facing scrutiny from the Competition Commission of India (CCI) after complaints from local retailers.
  • The Department for Promotion of Industry and Internal Trade (DPIIT) has requested the CCI to investigate Blinkit and Zepto for alleged anti-competitive practices.
  • Retailers accuse Blinkit and Zepto of using exclusive supplier agreements and deep discounts to gain an unfair market advantage.
  • The DPIIT claims these practices may harm smaller businesses and reduce competition in the market.
  • The CCI does not regulate prices but ensures fair competition in the market.
  • The DPIIT has highlighted that Blinkit and Zepto are allegedly signing exclusive agreements with suppliers, giving certain vendors an unfair advantage.
  • The e-commerce sector in India is projected to grow to $325 billion by 2030, driven by 881 million internet users.
  • Currently, e-commerce accounts for about 7% of India’s retail market, valued at $70 billion.
  • The CCI is already investigating Amazon and Flipkart for similar anti-competitive practices.
  • Critics argue that e-commerce platforms use a cash-burning model to offer deep discounts and undercut prices to capture market share.

The bigger picture

  • The DPIIT has raised concerns about the impact of deep discounts on local retailers and small businesses.
  • Exclusive supplier agreements are seen as a way to dominate the market and reduce competition.
  • The CCI is responsible for ensuring fair competition, even though it does not regulate prices directly.
  • E-commerce platforms are accused of launching exclusive products and offering steep discounts during festivals, which disrupt the market.
  • These practices may lead to higher prices for consumers in the long run if competition is reduced.

About the business

  • Blinkit is a quick commerce delivery service that provides fast delivery of groceries and daily-use products.
  • The company operates in urban areas where customers expect rapid delivery, often within minutes.
  • Blinkit competes with other quick commerce platforms like Zepto and Instacart.
  • The business model relies on offering deep discounts to attract customers and gain market share.
  • Blinkit generates revenue through delivery fees and product sales, but the model is criticized for being cash-burning.

The deal

Type
policy

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