Amid ongoing scrutiny of digital advertising practices, the quick commerce platform has sparked regulatory concerns by promoting Parimatch.
Amidst the ongoing Indian Premier League (IPL) season, Zepto, a prominent quick commerce startup, has landed in hot water. The company is facing backlash for displaying advertisements for Parimatch, an illegal offshore betting platform. Reported by MediaNama, this revelation has drawn significant attention. This is especially as the company has yet to issue an official statement about the controversy.
The incident comes shortly after another advertising scandal. Observers spotted Uber cabs in Delhi and Mumbai promoting the illegal betting platform 1xBet. Both Parimatch and 1xBet are based in Cyprus. They routinely operate numerous mirror sites to evade legal restrictions, especially during major sporting events like the IPL.
Parimatch keeps on maintaining visibility by digital advertising, in spite of being banned in India since 2023. This raises questions about the regulatory framework revolving such platforms. Previously, the Ministry of Electronics and Information Technology (MeitY) blocked a total of 581 applications under Section 69A of the IT Act, 2000. Of those, 174 were connected to betting and gambling platforms.
Zepto currently holds a 21% market share in quick commerce sector of India. It has attracted significant FDI or Foreign Direct Investment to scale its operations. The Confederation of All India Traders has alleged that Zepto is bypassing FDI regulations through directly selling products to consumers instead of acting only as a facilitator between sellers and buyers. If these allegations prove true, authorities could deem Zepto ineligible for FDI under the Foreign Exchange Management Act (FEMA), 1999.
Furthermore, Zepto Café, the platform’s in-house brand, has come under scrutiny for failing to display the manufacturer’s details on its portal. FDI norms require e-commerce platforms operating under a marketplace model to disclose the seller’s name, address, and contact information. These are currently visible on Zepto Café.
