The onset of the COVID‑19 pandemic dramatically reshaped consumer shopping habits, making ultra-fast delivery not just preferred but, in many cases, a necessity. This shift fueled the rapid rise of quick commerce, attracting significant investor interest and expanding beyond its original focus on food and related products. Today, quick commerce platforms are venturing into cosmetics, apparel, personal care, electronics and more, capitalising on the growing appetite for convenience.
However, this rapid growth has not gone unnoticed by regulators. In recent months, quick commerce players have found themselves under increasing scrutiny, particularly due to their reliance on dark stores – strategically located warehouses that cater exclusively to online orders. While these hubs are critical to meeting the promise of 10–20-minute deliveries, they also present unique regulatory and compliance challenges.
Regulatory Scrutiny of Dark Stores
Earlier this year, Maharashtra’s Food and Drug Administration (FDA) conducted inspections of several dark stores. These inspections uncovered multiple non-compliances, including improper storage and other consumer safety concerns, leading to immediate suspension of the operational licenses of such stores. With enforcement actions on the rise, it has become increasingly important to assess the impact on brand owners whose products are being sold on these platforms, and to examine the extent of their liability.
Key Compliance Considerations for Brand Owners
Each product displayed on quick commerce platforms is subject to a wide range of compliances under various laws, depending on its nature. Key compliance requirements include:
Labelling and Packaging: Products classified as pre-packaged commodities, or those falling under specific categories such as food, drugs or cosmetics etc. must comply with the Legal Metrology (Packaged Commodities) Rules 2011, alongside sector-specific legislations like -
For Cosmetics and Drugs - Drugs and Cosmetics Act 1940 and the Cosmetics Rules, 2020
For Food Products - Food Safety and Standards Act 2006 and regulations framed thereunder
These laws mandate declarations such as product name, manufacturer/packer details, net quantity, country of origin, date of manufacture/expiry and other such details.
Registration Requirements: Certain products require certifications or approvals by various regulatory frameworks, such as Bureau of Indian Standards (BIS) certification, Food Safety and Standards Authority of India (FSSAI) licensing, or approvals under the Legal Metrology regime. The list of categories under mandatory BIS certification continues to expand, now covering items such as footwear, furniture and household goods.
Storage and Handling Requirements: Some products attract storage-specific obligations, for instance:
The FSSAI mandates cold chain management for perishable foods
The Drugs and Cosmetics Act 1940 prescribe conditions for storage of pharmaceutical products
Non-compliance can result in spoilage, contamination and safety hazards, exposing both sellers and brand owners to significant regulatory and financial penalties.
Way Forward for Brand Owners
As multiple legislations often apply simultaneously, compliance responsibilities must be harmonised and clearly allocated between suppliers and e-commerce entities. With regulatory authorities intensifying enforcement against dark stores, non-compliance not only exposes e-commerce platforms to liability but also places brand owners at the risk of reputational damage and loss of consumer trust.
To mitigate these risks, brand owners should consider:
Contractual Safeguards: Drafting robust contracts with quick commerce companies, setting out specific compliance obligations for each stage of the supply chain and incorporating strong indemnity protections. Such contracts should clearly allocate responsibility for storage, transportation, labelling, returns, recalls, etc.
Supply Chain Diligence: Conducting regular diligence to actively monitor and enforce compliance across the supply chain.
By proactively addressing these compliance challenges, brand owners can safeguard themselves against regulatory exposure while strengthening consumer trust in a rapidly evolving quick commerce ecosystem.
