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Multiple retail trade associations and federations have written to the Indian government, expressing concerns that the growth of Q-commerce platforms is hurting their retail businesses. The Retailers Association of India (RAI) believes that instead of complaining about the rise of Q-commerce and e-commerce platforms, retailers should focus on upgrading themselves.

It's worth noting that several FMCG companies have reported strong double-digit growth in online sales through quick-commerce. According to a RedSeer report, the Q-commerce market is expected to reach $5.5 billion by 2025. The contribution of quick-commerce platforms to the online grocery market is projected to increase from 10% to 45% in the coming years. In 2023, the gross merchandise value (GMV) of quick commerce in India reached $2.3 billion, showing a growth of over 70% compared to the previous year.

On the sidelines of the Retail Technology Conclave, ReTechCon 2024, <strong>Kumar Rajagopalan, CEO of the Retailers Association of India (RAI)</strong>, spoke to <strong>Storyboard18</strong> about the ongoing Q-commerce vs. Retailers conflict, which has now reached the Competition Commission of India (CCI).

Addressing the allegations of unfair trade practices by Q-commerce and e-commerce platforms, Rajagopalan stated, “When it comes to unfair trade practices and allegations by retailers, we need to wait and see. The government has a mechanism to address such issues.”

Rajagopalan added, “As far as Q-commerce platforms are concerned, they are here to stay because customers are getting something they've always wanted. At RAI, we believe in creating a level playing field for all retailers, and the Indian government has already launched the Open Network for Digital Commerce (ONDC), which will likely incorporate hyper-local and fast-commerce capabilities.”

He went on to say, “We are waiting for ONDC to improve further, and RAI is actively working with them. I believe that when your trusted local retailer can provide the product you want, whether online or offline, at the desired speed, small retailers will naturally thrive.”

Rajagopalan emphasized, “Our goal is to help small retailers improve their operations. As the Retailers Association, we don’t believe in halting new or innovative businesses, but we aim to ensure everyone has a level playing field.”

Recently, All India Consumer Products Distributors Federation (AICPDF), which claims to represent about 800,000 entities, expressed concerns over the rapid expansion of quick commerce platforms. They allege that these platforms create an uneven playing field, negatively impacting small retailers.

The AICPDF submitted a complaint to the Ministry of Commerce and Industry, raising concerns about anti-competitive practices by quick commerce companies and calling for an investigation.

When asked about RAI's stance on this issue, Rajagopalan said, “The debate over whether retailers should be available both online and offline is now irrelevant. Customers are shopping both ways. Any retailer worth their salt must be available online and offline, which is why I support ONDC. You can’t do anything that goes against customer interests—it will backfire.”

He added, “The key is to enable everyone to do business for the customer. However, if someone is engaging in deep discounting or loss leadership practices that are anti-competitive, these should be addressed, and it’s the government’s responsibility to ensure such practices are stopped.”

“At RAI, we always emphasize a level playing field. No one should take undue advantage of the situation with unfair trade practices. At the same time, businesses should not expect things to be the same as they were a decade ago—COVID has changed all of us as consumers. Retailers must adopt new methods to upgrade themselves.”

The Department for Promotion of Industry and Internal Trade (DPIIT) has referred a complaint against quick commerce companies to the CCI for further investigation.

Moreover, Confederation of All India Traders (CAIT) has urged the government to suspend the 'festival sales' events of Amazon and Flipkart, as they will further harm domestic traders through the continued use of anti-competitive practices.

On September 26, Madras High Court lawyer K Narasimhan alleged in his complaint to the DPIIT that e-commerce platform Flipkart is offering discounts at product level for select sellers and creating a non-competitive environment. The letter was sent to the Department for Promotion of Industry and Internal Trade Secretary Amardeep Singh Bhalla.

‘Q-commerce is here to stay, retailers must upgrade themselves’, says CEO of Retailers Association of India

Festive season started with a bang as e-commerce players clocked in a sale of $3.5 billion in sales between 22 and 25 September, contributing to 60 percent of the projected GMV (gross merchandise value) of 5.9 billion for the whole first wave of festive sales, according to Redseer Strategy Consultants.

The first wave of festive sales comprises Flipkart’s Big Billion Days, Amazon’s Great Indian Festival, Meesho’s Mega Blockbuster Sale, besides sales on other platforms such as Myntra, Ajio, and Nykaa amongst others.

Redseer's report further states that the first four days of the festive period saw the overall Daily Average GMV (gross merchandise value) rise to 5.4x compared to BAU (business as usual) days for overall online retail. First 4 days of festive sale this year is 1.3x the first four days of the previous year festive sale.

“Redseer had earlier projected a GMV of $5.9 bn (Rs 41, 000 Cr) for festive sale 1 and as expected, we are on track to achieve this figure. 60 percent of our forecast is already achieved in the first 4 days of sale," says Sanjay Kothari, associate partner, Redseer Strategy Consultants. 

Around 50 to 55 million shoppers made purchases during the first four days of sales. In terms of categories, mobiles continue to be the top category driving the sales. The report states that during the first four days of sale 1,100 mobile phones were sold each minute, with a total of Rs 11,000 crores of mobiles sold on large e-commerce players. Premium phones (iPhone 12, 13 and OnePlus) drove mobile sales.

This has happened on the back of upgrade programs and new launches supported by value offers.

In terms of units, 60-70 lakh mobiles were sold in the first four days.  “We are expecting a total sale of 90 Lakhs - 1 Cr units of mobiles for Festive week 1. We are also seeing premium phones driving mobile growth this year,” said Sanjay Kothari, Associate Partner, Redseer Strategy Consultants.

Fashion category witnessed a 4.5x jump in terms of daily average GMV from BAU days, to reach Rs 5,500 crore in the first four days, it said.

E-commerce marketplaces usually hold up to three sales leading to the festival of Diwali. The first of these sales is usually the largest and usually accounts for more than 50 percent of the sales during the festive period. 
 
 
 


Ecomm players clock $3.5 bn in festive sales in four days: Redseer report

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