3 hours Ago By Team Inc42
Palicha said that India’s quick commerce ecosystem will bring a windfall of taxes and generate more jobs than what Indian Railways will create in the next two to three years He also rubbished concerns that Zepto was indulging in predatory pricing, saying that 0.2% of the units sold on the Zepto platform were below the cost price of the manufacturer in FY24 A day before, FM Sitharaman called for the need to maintain a balanced approach between quick commerce platforms and traditional kirana stores Responding to concerns that quick commerce platforms were hurting traditional kirana stores, Zepto cofounder and CEO Aadit Palicha has reportedly termed such “narratives” false and without data. In a chat with Moneycontrol, Palicha said that the quick commerce ecosystem is rather creating jobs and will bring a windfall of taxes to the country.
He reportedly went on to claim that the segment is well-poised to generate more jobs than what Indian Railways will create in the next two to three years. On Confederation of All India Traders’s (CAIT) allegations that quick commerce players were “killing” local mom and pop stores, Zepto CEO said that the Datum Intelligence report quoted by the traders’ body also showed that quick commerce platforms accounted for a mere $5 Bn in grocery and household essentials consumption between FY23 and FY24 out of the total $46 Bn. “The same Datum Intelligence report that CAIT quoted to try and prove that we are hurting kirana stores also shows $46 billion in added grocery and household essentials consumption between FY23 and FY24.
Quick commerce was less than $5 Bn in FY24. So if the incremental consumption growth was $46 Bn but QC is only $5 Bn, then where did the remaining $41 Bn go? It went mostly to the kirana store! Their own data shows that it’s impossible for quick commerce to have caused kirana stores to shrink,” Palicha added. He also rubbished concerns that Zepto was indulging in predatory pricing.
As per the report, Palicha claimed that 0.2% of the units sold on the Zepto platform were below the cost price of the manufacturer in FY24. He further said the platform’s approach to cut out middlemen was yielding cost benefits to end consumers.
This, the CEO claimed, was deflationary for the Indian consumer. Palicha’s comments come at a time when India’s quick commerce space is witnessing heightened competition. While incumbents such as Blinkit and Swiggy Instamart are rapidly expanding their catalogues and shortening their delivery times to grab a bigger market share, Zepto has raised more than $1.
3 Bn in the past five months to bolster its play and expand its offerings. While the entry of deep-pocketed Flipkart Minutes has further heightened the competition, the potential entry of Amazon in the quick commerce space next year as well as Myntra and Nykaa’s experiment with quick delivery model has fueled the rise of the segment. Such has been the meteoric rise that just a day ago finance minister Nirmala Sitharaman said that the success of quick commerce startups can boost India’s global reputation as a hub for innovative solutions.
Describing quick commerce as a “one-of-a-kind innovation” unique to India, she urged homegrown startups in the segment to leverage their solutions globally. However, the limelight has also brought with it renewed scrutiny. Trade bodies have lashed out at quick commerce platforms for eating into the sales of traditional kirana stores and for creating an uneven playing field.
Even FM Sitharaman acknowledged the challenges posed by quick commerce platforms to traditional brick and mortar stores. “..
. that’s not to say the brick-and-mortar retail is not doing fine, they are being challenged, I recognise that,” the FM said yesterday and called for the need for a balanced approach. Even veteran banker Uday Kotak recently said that while the success of quick commerce was a sign of Indian innovation , the segment posed a challenge to retailers.
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