How India's Open E-Commerce Initiative Plans to take on Giants like Amazon, Flipkart and Walmart?

uEngage Team, 25-Sep-2023

Big fishes like Walmart and Amazon, etc hold the dominance in the e-Commerce market, but tables are about to turn. Indian Government's One Network Digital Commerce (ONDC) is all set to break the command of such players in the e-commerce world. The very fact that major banks and commercial brands are set to invest and participate in this new era platform of ONCD, makes things even more exciting.

In April 2022, the Indian government with a soft trial-based launch of ONDC has entered the phase of rebuilding e-commerce in the country. Aimed at bringing buyers, sellers, and logistic partners all at an open network, ONDC is being termed the UPI of digital commerce. By the month of August 2022, ONDC is expected to reach over 100 cities in the country whereas the forecast for 5 years is to get the participation of over 1.2 million sellers and 900 million buyers. In just 2 years, the commerce ministry is expecting ONDC to cause a 25% increase in consumer purchases on e-commerce, a value that is 8% at present.

Whispers are that many banking sector giants like Axis, SBI, IDFC, HDFC, PNB, Kotak, etc are in talks with ONDC to invest, participate and set up a buyer platform, though no party has given official confirmation.

It would be naive to undermine the setup of Amazon and Flipkart, their inventory, customer service and fulfillment services, but open networks like ONDC are geared up to tighten the competition with big brands, small retailer,s and start-ups taking in the platform.  ONDC is designed to make buying and selling more accessible, and more convenient, add inventory value, modernize cataloging of e-commerce and fix the predatory high prices.

ONDC explained:

Open Network for Digital Commerce is a non-profit company and an eCommerce network, launched by the Government of India, which will display the inventory of all e-commerce participants to buyers in one place. So, any customer opening a participating platform app when searching for a particular product will see results from all other participating sellers on that same app. A buyer will no longer switch from apps like Amazon and Flipkart to search for a set of headphones, as he or she can see search results from all the apps (provided they are a participant of ONDC) AT ONE APP.

The challenges ahead for ONDC

The challenge is to end the domination of silos but to do so, ONDC will have to reach high and low from major players to small businesses spread across the country that might not have technological bandwidth. The Indian government is set to run a major marketing and awareness campaign through trading organizations with a reach to every corner of the country. ONDC has the power to display a small unknown seller to millions of users, thus augmenting the competition.

The bid to end the monopolies in e-commerce will connect small-town traders, retailers and delivery services to a wide-open network changing the course of online shopping.

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