Govt Looking Into Ownership Structures Of Dark Stores In Quick Commerce Industry, Says Report

The foreign direct investment rules of India don’t allow online marketplaces funded by foreign players to own inventory or control sellers on the platforms

The report cited sources and noted that the government is trying to get more clarity on the matter as the quick commerce players have disrupted the business of neighbourhood stores and retailers. 

Source : Unsplash

The authorities recently have been looking into the ownership structure of quick commerce firms and their dark stores and contacted senior executives in the ecommerce industry, media reports said. 

The government officials have contacted these executives about the mini warehouses operated by these companies, reported The Economic Times citing sources in the know. These dark stores are the backbone of the ecommerce industry which promises deliveries in 15 to 30 minutes.

However, the foreign direct investment rules of India don’t allow online marketplaces funded by foreign players to own inventory or control sellers on the platforms. Due to these restrictions, the dark stores are owned by separate entities but not owned by the players in the quick commerce industry. 

The report cited sources and noted that the government is trying to get more clarity on the matter as the quick commerce players have disrupted the business of neighbourhood stores and retailers. 

Recently, the leadership of a leading company in the industry said he met with Piyush Goyal, Commerce and Industry Minister, and his team and shared details with them about the nature of the investors involved in the firm and their long-term plans.

“What the government officials are trying to understand is if the platforms are compliant in how they run dark stores — at an ownership level — while having raised significant foreign funding in recent months. This is intelligence gathering since the sector is the buzziest in terms of consumer action and it is bound to have an impact,” the report quoted an industry source who met up with an official regarding the matter.

The executive further informed that discussions are going on to add in more detailed framework for the quick commerce segment in the broader ecommerce policy.