FMCG Distributors Raise Alarm Over E-commerce Pricing Disparities
FMCG distributors across India are urging major brands to address what they describe as severe market distortion caused by deep discounting on e-commerce platforms. As the festive season approaches—a critical period for sales—trade partners are seeking urgent corrective measures from manufacturers to restore price parity and protect traditional retail channels.
In a recent communication to FMCG companies, the All India Consumer Products Distributors Federation (AICPDF), which represents over 4.5 lakh distributors and members of the traditional trade, highlighted growing concerns related to ongoing discounts offered by online marketplaces. These discounts, the body claims, are significantly undercutting offline retailers and eating into the viability of their operations, particularly in rural areas.
Distributors are reporting instances where prices on platforms such as Meesho, Flipkart, and Amazon are not just cheaper than offline rates, but in several cases, are below distributor acquisition costs. Brands like Nivea, Clinic Plus, Himalaya, Fortune, and Park Avenue were among those cited in the AICPDF’s complaint. For example, Fortune’s 1-litre refined oil pouches were being sold online at approximately ₹68, while the offline purchasing cost stood at ₹88, highlighting a steep 22% gap that offline channels cannot compete with.
In response to these discrepancies, the AICPDF has demanded that FMCG companies blacklist entities violating price policies, ensure MRP adherence through stricter monitoring, and implement uniform pricing strategies across channels. Distributors are calling for quick intervention to stabilize the market ahead of Diwali, warning that failure to act could lead to reduced brand visibility in traditional retail outlets.
This tension underscores a broader shift in India’s FMCG landscape, where traditional retail, which still accounts for over 80% of the sector’s sales, is increasingly feeling the competitive pressure of digital-first sales strategies. While e-commerce offers brands expanded reach, industry observers caution that unchecked discounting could destabilize long-established distribution networks, leading to long-term erosion of brand equity and rural penetration.
With FMCG majors like Hindustan Unilever, Procter & Gamble, Godrej Consumer, and Dabur closely monitoring distribution demand patterns, how they respond to these calls for action will have significant implications for retail channel dynamics in the months ahead.