Govt Probes into Quick Commerce Platforms and its Dark Store Ownership Structures

In recent weeks, government officials have been seeking out many senior e-commerce executives to comprehend the ownership structures of quick commerce firms and their dark stores, which aids in delivering their product within 15-20 minutes on the platform, according to the Economic Times.

As per the report, dark stores are not owned by the quick commerce platform themselves. They are owned as separate entities. This is because India's Foreign Direct Investment (FDI) rules do not allow foreign-funded online marketplaces to own inventory or control sellers on their platforms. Despite these rules, there are loopholes in the structure.

The government is reportedly looking to understand whether these quick commerce platforms are complying with the rules in how they run the dark stores at the ownership level after having raised significant amounts from foreign funds in recent months.

This intelligence gathering owes its reasons to the sector's boom as witnesses a lot of consumer action.

As per a report by Citi, quick commerce remained the fastest online growing category with Blinkit and Zepto leading the charge. It is reported that the quick commerce segment in India is expected to reach $22bn by 2027 from just under $3bn in 2023.

The government is reportedly seeking clarification on the matter, people in the know said to ET, as it feels the rise of the quick commerce platforms is becoming detrimental to the businesses of neighbourhood stores and modern retailers.

Piyush Goyal, the Union commerce minister had reportedly met with a chief of one of the top three quick-commerce firms and Goyal's team was briefed about the nature of the investors in the firm and its plans.

It is said that despite the government's concerns, senior executives and investors who did not wish to be named reportedly said they do not anticipate any major disruptions from the government's standpoint as far as policy is concerned.

Discussions have also been said to have come up for the need for a broader policy framework in the quick commerce sector similar to the one in e-commerce.

E-commerce platform Amazon had to wind down Cloutail and Appario Retail, two of its largest sellers in India where it held stakes because of the government's regulations on FDI-funded e-commerce.