Instant Deliveries, Delayed Laws: The Regulatory Gaps in Quick Commerce

Author: Shambhavi, Campus Law Centre, University of Delhi.

Abstract

The rise of quick commerce (Q-commerce) in India, driven by changing consumer behavior during the COVID-19 pandemic, has revolutionized the grocery and essentials retail landscape. Q-commerce platforms, such as Zepto, Blinkit, Swiggy Instamart, and Big Basket Daily, promise rapid delivery, typically within an hour, meeting the demand for fast and efficient service. However, this emerging sector faces significant regulatory challenges due to the absence of clear legal classifications and frameworks. Current laws governing e-commerce, consumer protection, food safety, competition, labor, and environmental regulations are inadequate in addressing the unique business model of Q-commerce. Key issues include the ambiguity around liability for defective products, misleading delivery speed claims, the classification of platforms as intermediaries or direct sellers, exploitation of gig workers, environmental sustainability concerns, and compliance with foreign direct investment norms. This article explores the regulatory gaps and outlines the need for comprehensive legislative updates to better accommodate the dynamics of Q-commerce. The paper advocates for a more defined legal framework that ensures consumer protection, fair competition, labor rights, environmental sustainability, and proper investment oversight to facilitate the growth and ethical operation of Q-commerce platforms in India.

Keywords

Quick commerce, e-commerce, marketplace, retail, dark store, regulations, inventory

Introduction

The COVID-19 lockdown, which began with the panic buying of essential goods, had many lasting impacts on every sphere of life, one of them being the rise of a new marketplace for groceries—quick commerce.

The pandemic influenced consumer behavior led to an increase in the online purchase of perishables and groceries by customers. This demand was accompanied by instant delivery expectations, leading to the emergence of quick commerce businesses.

Quick commerce is e-commerce in a new, faster form. E-commerce refers to the online purchase, or sale, of a good or service. Quick commerce also referred to as Q-commerce emphasizes quick deliveries, typically in less than an hour.

Today, many players operate in the quick commerce business. Some are new players like Zepto while others are extensions of established players like Swiggy Insta mart, Blinkit, and Big Basket Daily amongst others.

These businesses are now part of the daily routine of anyone living in a Tier 1 city. But how are they regulated? Are they governed by the laws and rules in place for e-commerce businesses? Do the existing e-commerce laws act as an umbrella, or are there any legislative gaps that may cost both consumers and these businesses?

Existing rules in place for e-commerce

Information Technology Act, 2000

The law introduces legal recognition for electronic records, electronic signatures, and electronic contracts. The "safe harbour" immunity provided under section 79 is the most important provision under the act for the intermediaries. It provides conditional immunity to the intermediaries for third party content, subject to the condition that the role of the intermediary is limited to hosting, transmitting or making available content but not altering it. Further the celebrated case of Shreya Singhal v. Union of India, the Supreme Court clarified that the intermediary follows due diligence requirements prescribed by the government and upon receiving "actual knowledge", remove or disable access to the infringing content.

Even though Q-commerce is a subset of e-commerce, the applicability of safe harbour immunity to quick commerce depends on how the law classifies these platforms. If a Q-commerce platform merely connects customers to third-party sellers like Dunzo, it may enjoy safe harbour protection for issues related to defective products or third-party misrepresentation. If the platform owns inventory, controls pricing, or manages delivery, it might be treated as a seller rather than a neutral intermediary. Similarly, platforms like Zepto. Blinkit, Swiggy Instamart might not qualify for safe harbour because they store and deliver products themselves and could face direct liability for consumer issues. At present there is no legal classification of Q-commerce platforms as aggregators, marketplace or direct sellers. They primarily operate using dark stores or mini warehouses, which are small, local fulfillment centers located within the city or near the target customer base. These stores are not open to the public; instead, they are used exclusively for storage and picking of products for fast deliveries.

Consumer Protection Act, 2019

This legislation governs product liability, ensuring that consumers have legal recourse if they receive defective or unsafe products. The Act imposes strict liability on manufacturers for producing defective or unsafe products, sellers if they knowingly sell defective goods or provide misleading information. The marketplace or intermediaries are usually not liable unless they actively participate in selling. Once again the issue arises due to lack of classification of Q-commerce. If a customer suffers health issue on account of food he ordered from Blinkit, the legal question is:

Is Blinkit just a platform connecting the buyer and seller?
Or does Blinkit control the storage, quality, and delivery?

The Consumer Protection (E-commerce) Rules, 2020 do not clarify whether Q-commerce platforms should be treated as marketplace or direct sellers.

Under the CPA, 2019, platforms cannot misled consumers through false claims about product quality, misrepresentation of delivery times. There is no clear guideline on whether Q-commerce platforms are responsible for misleading speed claims. The Central Consumer Protection Authority has acted against misleading ads in traditional e-commerce but not specifically for Q-commerce delivery guarantees.

The Food Safety and Standards Authority of India (FSSAI) rules

The FSSAI rules require proper storage and handling of food products. But Q-commerce delivery models rely on dark stores or small local warehouses that may not be classified as official retail outlets and thus leading to lack of FSSAI monitoring. So now if a consumer receives spoiled dairy products from one of the Q-commerce platforms due to lack of proper temperature control in the dark store, who will be responsible – the brand or the Q-commerce platform?

The FSSAI Act does not directly address Q-commerce platforms managing food storage and quick delivery.

The Competition Act, 2002

The Act regulates anti-competitive practices in India, ensuring fair competition and preventing market dominance. Section 4 of the Competition Act prohibits dominant players from using predatory pricing to eliminate competition. Q-commerce platforms offer products at deep discounts, often selling at a loss to attract consumers but sustains itself using VC funding. Small retailers cannot match this pricing and may shut down. Though the Competition Commission of India has investigated E-commerce platforms like Amazon and Flipkart for similar deep discounting practices, the same is yet to be extended to Q-commerce.

Some q-commerce platforms enter exclusive agreements with brands or suppliers, blocking competitors from selling the same products. This is in violation of Section 3(4) of the Competition Act that prohibits exclusive agreements that reduce market competition. An investigation by India's antitrust body found food delivery giants Zomato and Swiggy breaching these laws with their business practices favoring some restaurants over others. Swiggy guaranteed business growth to certain players if they listed exclusively on its platform.

The Labour Laws

Labour laws in India do not fully recognize gig workers, they are not considered full time employees, so platforms exploit this loophole. Q-commerce platforms heavily rely on delivery riders for their functioning but classify them as “independent contractors” instead of employees. This bypasses the Minimum Wages Act, 1948 which mandates a minimum salary. Delivery riders are paid per order instead of a fixed salary. Platforms reduce per-order payouts whenever they want, forcing riders to work longer hours. They can also suspect or terminate riders anytime, with no explanation or notice period. The 2020 Code on Social Security recognizes gigs but does not enforce a minimum wage for them.

Similarly, the gig workers are not covered under the Employee Compensation Act, 1923 that mandates compensation for workplace injuries. 10- minute delivery promises force riders to overspeed, break traffic rules, and risk accidents leaving them vulnerable without any compensation. The code on Social Security also does not make Provident Fund, Employee Insurance or gratuity mandatory for them.

Environmental Laws

India’s environmental laws do not explicitly regulate quick commerce, allowing platforms to exploit grey areas. Unlike traditional E-commerce, which groups multiple orders, Q-commerce riders rush with single-item deliveries, increasing fuel consumption. The 10-minute delivery model discourages the use of electric vehicles (EVs), as riders cannot recharge batteries frequently. Unlike traditional e-commerce, Q-commerce platforms are not required to report sustainability metrics.

Quick commerce practices also violate Solid Waste Management Rules of 2016. They stock large quantities of perishable food in dark stores and due to unpredictable demand, excess stock often expires, leading to food wastage. Instead of redistributing unsold food to charities, platforms dump waste improperly, violating waste disposal norms. A Zepto dark store in Bangalore was found discarding expired dairy products in open garbage bins, instead of following proper organic waste disposal methods. The Solid Waste Management Rules, 2016, mandate proper segregation, recycling, and disposal of organic waste. The Food Safety and Standards Authority of India encourages food donation, which is not mandatory, creating a legal loophole.

Dark stores and warehouses consume excessive electricity and water for refrigeration, lighting, and logistics. A Swiggy Instamart dark store in Hyderabad was found consuming high amounts of electricity for refrigeration, with no solar power or energy-efficient alternatives. Also, since most of these dark stores are located in residential areas to ensure quick deliveries, they operate 24/7, causing noise pollution. Constant vehicle movement, loading/unloading of goods, and generator noise disturb local communities.

Foreign Direct Investment (FDI) norms

India restricts FDI in multi-brand retail such as supermarkets but the business models of Q-commerce often bypass FDI norms. Current FDI rule allows 100% FDI in single-brand retail and 30% in multi-brand retail subject to government approval and local sourcing norms. Q-commerce players own and control dark stores making them multi-brand retailers in disguise. However, they claim to be e-commerce platforms, which allows them to receive 100% FDI under marketplace models.

Press Note 2 (2018) prohibits FDI-funded platforms from influencing prices, but Q-commerce firms use foreign money to subsidize discounts. They offer artificially low prices, which small Indian retailers cannot match.

The Indian government encourages foreign investment in startups, making regulation difficult.

Conclusion

Quick commerce in India is growing rapidly, but the legal framework has gaps and ambiguities, as regulations have not fully caught up with its unique business model. The lack of clear classification for Q-commerce platforms creates confusion around their legal status, complicating the application of liability and consumer protection standards. Moreover, ambiguities in areas like product quality, delivery speeds, labor rights, environmental sustainability, and antitrust practices highlight the urgent need for tailored regulations that address the unique characteristics of Q-commerce.

To ensure a balanced and fair marketplace, it is imperative for lawmakers to revise and expand the legal framework to encompass the realities of Q-commerce. This should include clearer definitions, updated consumer protection rules, labor reforms that address the gig economy, stronger environmental regulations, and more robust guidelines on fair and foreign investment. Only through proactive regulation can the benefits of Q-commerce be fully realized.