E-Commerce: India readies ONDC to take on Amazon, Flipkart
Virendra Pandit
New Delhi: To take on global e-commerce behemoths like Amazon Inc., and Walmart-owned Flipkart, India is readying to launch its own Open Network for Digital Commerce (ONDC) across 100 towns and cities by August.
The Centre estimates that India’s e-commerce market would grow from nearly USD 55 billion in gross merchandise value (GMV) in 2021 to USD 350 billion by 2030. Currently, Amazon and Flipkart control over 60 percent of the market.
ONDC is a non-profit company that the Centre soft-launched in April as a prospective alternative to dominant global majors poaching in its fast-growing e-commerce market. Its network will enable the display of products and services from all those taking part on e-commerce platforms in search results across all apps on the network, the media reported on Thursday.
The ONDC platform is targeting to raise e-commerce penetration in the next two years from 8 percent now to 25 percent of India’s consumer purchases. With this aim, it would sign up nearly 90 crore buyers and 12 lakh sellers on the shared network within the next five years, and achieve a gross merchandise value of USD 48 billion.
Existing e-commerce platforms keep out many small players. The ONDC would onboard them to increase competition and foster innovation by start-ups as a major booster for local employment generation. It would also rope in logistics firms and others to collaborate with sellers to deliver products to customers. Its focus would be on small merchants and rural consumers, and launch apps in the Indian languages to facilitate and boost business.
Its users will rate service providers on ONDC, which will apply and be visible across the network.
Officials said ONDC will help end “predatory pricing, especially in high-margin, high-value products”. It aims to tap millions of small businesses that often lack technological expertise. The government will run a massive awareness campaign to get them on board.
ONDC, expecting to break Amazon and Walmart’s dominance in the e-commerce sector, is lining up leading banks in both the public and private sectors, and other key players needed to move it forward, the reports said.
These banks would set up “buyer platforms” to let their customers place orders for goods and services over the ONDC that promise equal access to all online sellers and buyers regardless of their size. The platforms would allow the banks to drive the use of their cards, loans, and other services.
The banks and other financial institutions are rolling out a combined initial investment of Rs. 255 crore in the ONDC project.
