Amazon joins the Indian government-backed e-commerce initiative that aims to “democratize” online shopping in the South Asian market, amusingly challenging the dominance of companies like the US retail group.
In a statement Friday, Amazon said it will integrate its logistics network and SmartCommerce, its platform to digitize convenience stores, into Open Network for Digital Commerce, a non-profit company set up in 2021 by India’s Ministry of Commerce.
“Amazon’s vision and commitment to India aligns closely with ONDC’s goals of digitally enabling small businesses and bringing convenience and choice to customers across the country,” Manish Tiwary, country manager for Amazon India, said in a statement.
Amazon’s participation in the initiative, backed by the Indian government, is notable because part of ONDC’s pitch so far has been that it seeks to disrupt Amazon’s and Walmart’s Flipkart’s monopoly in the Indian e-commerce market.
ONDC is an “interoperable” network, where buyers and sellers can conduct business regardless of the app or services they use, disrupting consumers’ reliance on using Amazon and Walmart’s proprietary services.
With ONDC, New Delhi is trying to replicate the success it had with UPI, the mobile payment interoperable network, which disrupted the walled mobile wallets of companies like Paytm and MobiKwik. Paytm is a participant in the ONDC network.
And while it’s ONDC’s early days, the model still has a lot of things to iron out, industry executives say.
It is unclear who is responsible if, for example, a customer does not get their order delivered. And unlike UPI, which saw New Delhi aggressively promoting the digital payment network, ONDC has received little public praise and support.
“We are pleased that Amazon has a clear roadmap to become part of the ONDC network and is taking its first step to join the ONDC network as a logistics partner, a global pioneering idea conceived with a view to democratizing of digital commerce in India,” said T Koshy, MD and CEO of ONDC, in a statement.