India is launching the Open Network for Digital Commerce (ONDC) to help small merchants, and rein in big players.
India has launched the pilot phase of open network for digital commerce in five cities: Delhi NCR, Bengaluru, Bhopal, Shillong and Coimbatore.The goal of the project is to democratize the fast-growing e-commerce sector and help small businesses and retailers who fear being displaced from foreign platforms operating in the country.
The project of non-for-profit, government-run network will help small merchants get the infrastructure and audience reach they need at least as much as the giant firms. Essentially, the government would create its own e-commerce ecosystem for everyone.
Dynamic pricing, inventory management and optimisation of delivery cost are the three important things in ONDC which will help reduce the cost of doing business on the platform.
According to Bloomberg, the project's unspoken objective is to curb the powers of Amazon and Flipkart, whose online domination has alarmed small merchants and the millions of local stores that form the nation’s retail backbone.
Amazon and Flipkart captured 80% of the online retail market in India with aggressive discounts and promotion of preferred sellers.
Technology tycoon Nandan Nilekani, founder of Infosys Technologies Ltd, is working with Prime Minister Narendra Modi to create the ONDC.
Lenders including ICICI Bank Ltd. and state-owned Punjab National Bank and State Bank of India have bought stakes in the entity.
Nadan Nilekani has already helped the Indian government create the Aadhar biometric ID system for India's nearly 1.4 billion people, and has also helped introduce the Unified Payment Interface, or UPI.
Anand Mahindra, chairman of Mahindra and Mahindra Group, tweeted about ONDC:
“We are on the cusp of a world beating retail revolution. It will democratize e-commerce, free us from the domination of a few giants and empower millions of small shop owners”.
India with its almost 800 million smartphone users and enormous potential has become a battlefield for many companies, including Google, Meta (banned and recognized as extremist in Russia) and local giants like billionaire Mukesh Ambani's Reliance.