The government in New Delhi is attempting to assemble an “open network” for Indian e-commerce to challenge the dominance of US-owned Amazon and Walmart.
The Open Network for Digital Commerce (ONDC), launched in April, would allow customers to place orders for goods and services.
The ONDC is trying to recruit banks, venture capitalists and telecoms companies to its Indian e-commerce platform.
State Bank of India, Axis Bank, Punjab National Bank, ICICI, HDFC, Kotak Mahindra and IDFC First are among other lenders in discussions with ONDC to set up buyer platforms.
Redefining Digital Commerce
Kotak said it had invested in ONDC with the belief that the project would “redefine digital commerce in the country”.
It did not comment on buyer platforms for the network, which would promise equal access to all online sellers and buyers regardless of their size. The banks would give their customers access to ONDC.
Bank of Baroda’s chief digital officer, Akhil Handa, said his bank was in talks about the project but it was too early to talk about specific use cases. “This certainly has the potential to be the next big thing,” he said.
Prime Minister Narendra Modi faces pressure from small businesses to act against the outsized influence of Amazon and Walmart’s Flipkart in the Indian e-commerce sector.
Challenging Big Tech’s Dominance
Policymakers in other countries as well are looking at ways to rein in big tech companies’ dominance of online purchases.
“If you look at the seller side, anybody who can make their digital catalogue visible using this common language will have access to a large pool of buyers shared across apps,” ONDC chief executive T Koshy said about the network. “It is no longer controlled by one large corporation.”
Indian e-commerce was worth more than $55 billion in gross merchandise value in 2021 and will grow to $350 billion by the end of this decade, according to government estimates.
Amazon and Flipkart control more than 60% of that market, which now accounts for about 8% of consumer purchases in a country of 1.35 billion people.
ONDC aims to cover at least 100 cities and towns by August, with a target of signing up 900 million buyers and 1.2 million sellers in five years.
- Reuters, with additional editing by George Russell