Amazon joins the Indian government-backed e-commerce initiative that seeks to “democratize” online shopping in the South Asian market and playfully challenge the very dominance of companies like the US retail group.
In a statement on Friday, Amazon said it will integrate its logistics network and SmartCommerce, its platform for digitizing neighborhood stores, into the Open Network for Digital Commerce, a non-profit company created by the Indian Ministry of Commerce in 2021.
“Amazon’s vision and commitment to India is closely aligned with ONDC’s goals of digitally enabling small businesses and bringing convenience and choice to customers across the country,” said Manish Tiwary, Country Manager, Amazon India, it’s a statement.
Amazon’s involvement in the initiative, backed by the Indian government, is notable because part of the ONDC’s pitch to date has been that it seeks to disrupt Amazon’s and Flipkart’s monopoly of Walmart in the Indian e-commerce market.
ONDC is an “interoperable” network, where buyers and sellers can conduct business regardless of the application or services they use, breaking consumers’ reliance on using proprietary services managed by Amazon and Walmart.
With ONDC, New Delhi is looking to replicate the success it has had with UPI, the interoperable mobile payments network, which disrupted the walled-garden mobile wallets of firms like Paytm and MobiKwik. Paytm is a participant in the ONDC network.
And while it’s the early days of ONDC, the model has a lot to figure out, say industry executives.
It is not clear who is responsible if a customer does not receive their order, for example. And unlike UPI, which saw New Delhi aggressively promote the digital payments network, ONDC has received little public praise or support.
“We are happy that Amazon has a defined roadmap to be part of the ONDC network and is taking its first step to become the logistics partner in the ONDC network, which is a global pioneering idea established in order to democratize digital commerce in India,” said T Koshy, MD and CEO of ONDC, in a statement.
