FM Sitharaman Wants Brick-and-Mortar Retail Survive Alongside Q-commerce to Strengthen India's Brand Image

In a recent press meeting, Finance Minister Nirmala Sitharaman pointed out the transformative potential of Quick Commerce (Q-commerce) in positioning India as a hub for innovative solutions on a global scale. While recognizing the challenges posed by these platforms to traditional Kirana stores, she stressed the importance of supporting brick-and-mortar retail alongside leveraging Q-commerce to strengthen India's brand image.

Rise of Q-Commerce and Its Impact on Kirana Stores

Quick Commerce, characterized by speedy product deliveries, has emerged as a groundbreaking innovation unique to India. Platforms such as Blinkit, Instamart, Zepto, and BigBasket have gained prominence for their rapid delivery services, offering convenience to consumers. However, the rapid growth of Q-commerce has raised concerns about its impact on traditional Kirana stores.

A survey by Datum Intelligence projected a significant shift of $1.28 billion in sales from Kirana stores to Q-commerce platforms by 2024. Around 67 percent of Kirana store owners reported a decline in sales following the rise of these digital platforms, indicating a shift in consumer preferences towards online convenience and speed. [Source: MoneyControl]

Government Response and Concerns over FDI Norms

In response to the escalating debate, Commerce and Industry Minister Piyush Goyal emphasized the importance of adhering to FDI norms in the e-commerce sector. Foreign Direct Investment regulations prohibit e-commerce companies from engaging in multi-brand retailing through an inventory-based model.

The Confederation of All India Traders (CAIT) released a white paper accusing certain Q-commerce players of undermining Kirana stores by leveraging deep discounts and misusing FDI norms.

Sitharaman discussed the need for regulatory scrutiny and the importance of compliance with the law to ensure a level playing field for all stakeholders. The existing regulations allow e-commerce platforms to serve as facilitators for third-party transactions without direct involvement in inventory or sales.

India's Quest for an Indigenous FDA

Sitharaman advocated for the establishment of an indigenous Food and Drug Administration (FDA) in India to set global standards for pharmaceutical products. She was optimistic about India’s potential to create its own regulatory body that aligns with international benchmarks while catering to the unique needs of the domestic market.

She batted for a "Bharat FDA" for the nation to assert its regulatory autonomy and promote innovation within the pharmaceutical sector.

Also read: 2 Lakh+ Kirana Stores Shut Down with Quick Commerce Surge in India (startuppedia.in)