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The Indian consumer sector stands at the cusp of exponential growth, driven by rising disposable incomes, rapid urbanization, increasing internet penetration, and a young, aspirational population embracing digital lifestyles. As the sector evolves with rapid digital adoption, pricing strategies are also becoming central as to how brands compete. Yet, amid the rush for market share, a troubling trend that’s emerging is multiple pricing practices across multiple platforms.
Beyond legal and ethical implications, these pricing inconsistencies are quietly eroding critical pillars of business success: brand identity, and consumer and investor trust.
Unfair pricing broadly refers to scenarios where consumers pay more or less than the fair market value of a product, often without transparency or consistency. This is manifested in several ways:
While competitive pricing is a key strategy in any free market, opaque or manipulative pricing creates friction, especially when it undermines the perceived fairness of transactions.
On digital marketplaces, price inconsistency is a recurring issue, with multiple sellers listing the same product at varying prices. Algorithms often highlight the steepest discounts, regardless of price parity with offline stores or actual value. Additionally, on digital platforms, discounting practices are often compounded by dark patterns such as “drip pricing,” where additional charges like handling or delivery fees appear late in the checkout process, and “false urgency,” which nudges users to buy quickly based on misleading stock or time-limit cues, further distorting perceived value. A Grant Thornton Bharat survey conducted last year had revealed 9 out of 10 people are influenced by discounts for their purchase decisions. From a Consumer perspective, it is critical that they have a full visibility on the actual MRP of the product.
Digital companies also often charge hidden costs for convenient delivery services. Markups of 5–20% over MRP are levied, in form of additional charges (delivery, handling, etc.) especially in Tier-1 cities during peak hours and festive season. A 2024 consumer watchdog report revealed that during Diwali, some platforms charged up to INR 50 more for festive essentials under the guise of an “availability premium.” Though consumers may tolerate higher prices initially, consistent overcharging risks brand loyalty, with brands being viewed as complicit even if they don’t control end pricing.
The government has also raised red flags about predatory pricing by digital companies in the recent past and highlighted concerns around large platforms using deep discounting to eliminate competition from smaller players, particularly in consumer goods categories. The compliance authorities have previously maintained a cautious stance, emphasizing the need to ensure a level playing field for all modes of sales. However, with rising complaints from industry bodies and associations, the authority has begun to scrutinize patterns of pricing that distort competition and mislead consumers. The government, on multiple occasions, has emphasized its commitment to fostering fair competition, stating that while online commerce offers significant benefits, it is essential to ensure that small retailers can survive and coexist with online services.
Unfair pricing may seem like a short-term marketing lever, but it chips away at core pillars of a healthy consumer ecosystem.
Impact on brand identity: When products appear with steep and inconsistent pricing, they lose their perceived value. A product that costs INR 250 on one platform and INR 300 on another—both claiming a “20% discount”—confuses consumers about its real worth. This damages brand integrity, especially for premium or heritage FMCG brands.
Erosion of consumer trust: Trust is the cornerstone of any consumer-brand relationship. Mutiple pricing creates suspicion that the brand is complicit in pricing manipulation, even if it has no direct role in setting prices on third-party platforms.
Channel conflict and brand dilution: Dual MRPs or promotional pricing online often undercut offline retailers, leading to channel friction. This undermines loyalty from long-term partners like kiranas and regional distributors—key to rural and Tier-II market reach.
Governance and sustainability concerns: Investors are increasingly focused on ESG and ethical governance. Pricing manipulation—especially if done through opaque third-party arrangements—raises red flags about long-term viability and leadership integrity.
Unviable growth models: If a brand is growing primarily through deep discounting or subsidized sales, investors rightly question whether that growth is durable. Over 60% of institutional investors now evaluate pricing integrity in assessing consumer businesses.
Regulatory overhang risk: With the regulatory authorities stepping up oversight and the government voicing concern, companies engaging in or enabling unfair pricing may find themselves on the wrong side of regulatory action. This introduces legal risk and potential reputational damage—both of which investors are wary of.
To preserve consumer trust, safeguard brand identity, and ensure long-term market sustainability, stakeholders across the value chain must take proactive steps to address pricing disparities. Here are five key recommendations to guide responsible pricing practices:
Establish robust pricing governance: Brands should actively monitor how their products are priced across digital platforms. This includes setting internal controls, auditing partner pricing, and ensuring that discounts are not artificially inflated or misleading.
Availability of certain pack sizes: Companies can develop different pack sizes and SKUs to avoid direct price comparisons across channels while catering to the unique consumption behaviour. This strategy allows for flexibility in pricing without compromising brand consistency or violating fair pricing norms.
Build platform accountability for price integrity: For premium and branded products, platforms must ensure that the product’s actual MRP is clearly visible at the point of sale, alongside any discounts. This is crucial for categories where product quality and brand positioning are core to the purchase decision.
Strengthen policy and regulatory oversight: Emphasis must be placed on creating a level playing field for all players—large platforms, emerging brands, and traditional retailers alike. Fair competition safeguards market diversity, encourages innovation, and reduces the risk of monopolistic pricing practices.
Make pricing discipline an investment criterion: Investors should integrate pricing integrity and governance into their due diligence process. A company’s ability to sustain demand without deep discounting should be viewed as a marker of both brand strength and long-term viability.
In an age where consumer awareness is at an all-time high, pricing transparency is not just ethical—it’s strategic. It is pertinent that pricing can no longer be a grey area in the race to acquire users and boost topline figures. With the regulatory authorities signaling a stricter stance and consumers growing more price-aware, brands and platforms must re-center pricing around fairness, transparency, and long-term value creation.
This article first appeared in the ET Retail on 22 April 2025.