Zepto And Zomato Face Anti-Trust Case as Products Given Excessive Discounts

Consumer Product Distributor has filed a case against Swiggy, Zepto, and Zomato for Antitrust cases as they have violated the discounting process. They have been called for an investigation and evidence of which is available in legal papers. E-commerce in India is being scrutinized because of its unruly pricing strategy. Last year's investigation identified that Walmart and Amazon were keeping Predatory Pricing which might affect the small retailers. Both the companies had defended their allegations.

Quick e-commerce has changed the game, as most of the personal and domestically needed products are delivered in minutes. The sector's demand has increased over time, further enhancing business development. However, small retailers have become upset because of the discount practices being applied. It is also estimated that the quick e-commerce platform would reach a whooping market cap of 35 billion from 200 million.

All India Consumer Products Distributors Federation is about to file a case with the Competition Commission of India. The competition commotion in India has asked the companies to explain how the discounts and prices are being rolled out for the customers. "An alarming trend of predatory pricing and deep discounting practices by Q-commerce platforms resulted in unfair pricing models," claimed the documents from case files.

While none of the companies reacted to responded to the questions from Reuters. The case has been filed and the case is ongoing. The case filing will be challenging for Swiggy and Zomato as they have also been charged with breaching competition laws. Zepto recently announced that it will be applying for an IPO after it successfully raised a valuation of more than $5 million.

The case will be reviewed soon and then the orders for investigation will be made and the matter will be closely looked into. This can take months or even years and the businesses might have to explain the mode of the business and how they are functioning. Moreover, the case can be dismissed if the panel finds no cause or importance in it.

A survey from Datum Intelligence claimed that out of all the quick e-commerce purchasers, 36 percent of people stopped visiting supermarkets because of the easy availability of the materials that too at their doorstep. A retailer gets a bottle of coffee at 722 whereas quick e-commerce sells the same products at 522 or less. This has led to a discount of a huge amount leading to immense challenges among the small retailers.

It is also estimated that Blinkit has close to 1007 small warehouses, accounting for 40 percent of the market share followed by Swiggy and Zepto with 29 and 26 percent market share respectively.