Traders’ body CAIT urges govt to regulate quick commerce-OxBig News Network

The association, representing numerous small traders, urged for a policy resolution that includes immediately enforcing foreign direct investment (FDI) policies across the broader e-commerce market (including quick commerce) and implementing e-commerce rules under the Consumer Protection Act to protect small businesses.

CAIT also proposed levying a luxury tax under GST on purchases made through e-commerce platforms.

Additionally, the association said that its affiliates, such as the All India Consumer Products Distributors’ Federation (AICPDF) and the All India Mobile Retailers Association (AIMRA), will approach the human rights commission regarding the well-being of gig economy workers.

Earlier this year, AICPDF filed a petition with the Competition Commission of India (CCI), alleging deep discounts and unfair practices by quick commerce platforms.

Retailers seek oversight 

During a Tuesday meeting, CAIT members asserted that quick commerce firms have distorted the retail market through excessive discounting and expansion in major cities, forcing numerous small store owners to close. Backed by private investments, these platforms can expand rapidly while offering discounts and convenience, they added.

“CAIT will make recommendations to the Commerce Minister and the Consumer Affairs Minister and brief them. They have already expressed concerns, and the government is working on that,” said Praveen Khandelwal, secretary general, CAIT.

“The Indian government has almost prepared the e-commerce policy after much deliberation. We feel now is the right time for both the e-commerce policy and (e-commerce) rules under the Consumer Protection Act to be implemented to safeguard the retail democracy in the country,” he said on the sidelines of an event held in the capital. 

“It’s (quick commerce) an entirely new sector, but there is no regulatory framework yet. We request the government to also form an independent regulatory body for digital commerce to cover both e-commerce and quick commerce platforms,” he added.

Small traders raise alarm

Small traders have been at loggerheads with quick commerce platforms that they claim have eaten into the business of local mom-and-pop stores.

Quick commerce firms have reshaped the retail landscape in India over the last two to three years. Companies such as Zepto, Blinkit and Swiggy Instamart, promising deliveries in under 30 minutes, have helped shoppers replace trips to small grocery stores with online orders. Quick commerce platforms reported a 77% jump in gross merchandise value to $2.8 billion in 2023, as per Redseer data. The quick commerce market is expected to grow by over 40% annually until 2030, per estimates by Bain & Co.—fuelled by expansion across categories, geographies, and customer segments.

CAIT has also recommended that online platforms be prohibited from running inventory-led operations, wherein the platform owns and sells the inventory. Instead, they should work as marketplaces that allow third-party sellers to sell goods to shoppers via the platforms. 

India allows 100% foreign direct investment or FDI, under the automatic route for marketplace models; FDI is not permitted in inventory-based e-commerce models. The association also sought mandatory transparency in algorithms, pricing, and seller selection that quick commerce firms deploy. 

“We are asking the government for protection and promotion of small retail stores,” said Khandelwal.