India’s quick commerce has been booming, but it has a problem that scaling up at such a rapid speed leads to. And invariably enough, the stage seems set for a government crackdown on the whole e-commerce ecosystem.
A few days ago, Food and Consumer Affairs Minister Prahlad Joshi ordered an investigation into the functioning and dark pattern practices of e-commerce platforms after citizens complained of being offered discounts and then being charged under multiple heads, like handling and even something called a ‘protect promise fee’
Categorising the extra cash being charged on delivery as a “dark pattern that misleads and exploits consumers”, the minister said, “A detailed investigation has been initiated and steps are being taken to scrutinise these platforms closely. Strict action will be taken against those violating consumer rights...”
Interestingly, it was only the first time Indian quick-comm had been with the authorities in recent months. A few days after the newly rationalised GST rates came into effect, community platform LocalCircles had alleged that many of the quick-commerce sites were not passing on the new rates. While the survey said just 1 out of 10 consumers said they received the full benefit of the reduction in GST rates, 2 in 10 said they received just partial benefits. LocalCircles founder Sachin Taparia also posted screenshots of various online retailers selling essentials and food items at the old rates. He argued that the trend was rampant, and being indulged in not just by quick commerce companies, but fashion online marketplaces as well.
GST benefits missing?
In fact, LocalCircles continued its monitoring of prices and whether companies were adhering to the new rates, pointing out a marked improvement by the second week. However, on Sunday, LocalCircles brought out another study on the oft-repeated complaint against ecommerce sites, with drip pricing (showing only base fare first, like airline companies do) experienced by 75% of users, while nearly half experienced dark pattern tricks like Bait & Switch (shown price changes when one goes into the buy process) as well as Privacy Zuckering (tricking users to give more personal data than intended).
India’s quick-commerce sector’s brush with the powers that be was perhaps inevitable, considering the lightning-fast speed at which it came out of nowhere and took over India’s retail sector.
Worth Rs 44,000 crore right now, quick commerce has even put the fear of God into both the big-time stalwarts of electronic commerce like Amazon and Flipkart, both of which had had to come out with their own quick delivery formats under heat, titled Amazon Now and Flipkart Minutes respectively, in the past year or so.
With Indian consumers having taken to the convenience of quick deliveries, last-minute buying from the comfort of their home, impulse shopping whenever one wants to, as also the many array of offers generally for the taking, market analysts estimate q-com to shoot up further to 2.6 lakh crore rupees by the time this decade closes. Not bad for a nascent online shopping category that was worth just about Rs 2.5 crore two to three years ago, right?
Well, it has also got them square in the crosshairs of not just conventional e-commerce rivals, but even the traditional brick-and-mortar convenience stores around the corner across India. Neighbourhood stores and even FMCG companies have approached the Competition Commission of India against the quick-comm onslaught, while the powerful All India Consumer Products Distribution Federation has called on the government to take action.
That seems to be happening, in varying degrees. Dark stores of various quick commerce players have been raided over the past few months in various parts of the country. Just yesterday, the Food Safety department in Haryana raided a dark store run by Blinkit, by all estimates, it’s the category leader, for selling rotten paneer, obviously past its expiry date, not once, but twice to the same customer. With the pre-Diwali week being the biggest money spinner in Indian retail, these actions by authorities, as well as those expected in the coming days, couldn’t have come at a more delicate time for the boom town boys.
