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Indian household goods sellers have threatened to disrupt supplies to family stores if consumer companies supply products at lower prices to Reliance Industries, according to a letter seen by Reuters.
Reuters reported last month that Indian sellers representing companies such as Reckitt Benckiser, Unilever and Colgate-Palmolive said their sales fell 20-25% in the past year as mom-and-pop stores were increasingly teaming up with Indian billionaire Mukesh Ambani’s Reliance.
Ambani’s greatly reduced offerings prompted more stores to order digitally from its JioMart Partner app, posing an existential threat to more than 450,000 corporate sellers who, for decades, served every corner of the vast nation going from store to store to take orders.
Citing the Reuters article, the All India Consumer Products Distributors Federation – which has 400,000 members – wrote to consumer companies demanding a level playing field, saying they must get products at the same prices as other big companies distribution companies such as Reliance.
If the demand for price parity is not met, the group said in its letter, its vendors will stop distributing products to mom-and-pop stores, nor will they supply newly launched consumer goods if they are. such partnerships continue beyond January 1.
“We have gained a reputation and goodwill among our retailers by providing them with good service for many years … We have decided to call it a ‘non-cooperation’ movement,” the letter said.
Group chairman Dhairyashil Patil said the letter was sent to Reckitt, Hindustan Unilever, Colgate and 20 other consumer goods companies.
None of the three consumer companies, as well as Reliance, responded to requests for comment.
Mum-and-pop stores, or “kiranas,” represent 80% of India’s nearly $ 900 billion retail market.
About 300,000 of those stores in 150 cities order products from Reliance, with the company setting a target of 10 million partner stores by 2024.
Traditional distributors told Reuters they were forced to cut fleet of vehicles and staff because their business suffered because they could not match Reliance’s prices.
Jefferies estimated in March that Kiranas “will steadily increase the share of” Reliance “purchases at the expense of traditional distributors.”
Such sales for Reliance could reach $ 10.4 billion by 2025, compared to just $ 200 million in 2021-2022, Jefferies estimates.