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How the government could bring ‘bad news’ for Amazon, Flipkart


How the government can bring bad news to Amazon Flipkart

Proposed open network for digital commerce (ONDC) seeks to control digital monopoly and create more inclusiveness in the digital commerce ecosystem. As a platform to promote open networks developed on open source methodology, ONDC will also enable more micro, small and medium enterprises to access the digital spectrum.

The initiative of the Department of Industry Promotion and Internal Trade aims to bring buyers and sellers on one platform. It will break the retention that Amazon and Flipkart have on ecommerce.

Koshy T, CEO, ONDC, said: “The real difference will come when we see small merchants from different cities being able to make their products show the same without having to be is part of a large established foundation,” said Koshy T, CEO, ONDC, while speaking at Indian Venture and Alternative Capital Association (IVCA) Conclave 2022. “Assuming a very specialized handloom saree from Kanchipuram could get a deterministic way of making such a product visible. So when some of these things happen, it really unleashes the power of SMEs.”

ONDC is working closely with many agencies that can help these businesses get online. “We are looking to do two things. First, educate them and give them a solution. And, second, make sure that the logistics are done. So we started tuning with different states and entities including SIDBI and NABARD‘ added Koshy.

According to a recent report by management consulting firm RedSeer, the e-commerce market in India is expected to reach a market size of $5.5 billion by 2025, up from $700 million today. . ONDC’s initiative aims to drive more innovation by including more players in its scope.

Rajan Anandan, Managing Director, Surge & Sequoia Capital India LLP, said ONDC is expected to become UPI moment of e-commerce in India. “The aim here is to democratize commerce, from a consumer interface point of view as well as for the millions of merchants in India.”

Foreseeing what momentum could play out for e-commerce companies, Anandan emphasized that a new generation of consumer-friendly commerce companies could emerge as the network extend. “In India, the first stage of e-commerce is the current big boys like Flipkart and Amazon. One could argue the latter is vertical players like Nykaa and Lenskart. The third stage is social commerce with companies like DealShare. And I think the fourth phase that will really take the commerce from 150 million current users to 500 million will most likely be the new generation of front-end players who take advantage of all the back-end infrastructure- this end,” he added.

Further explaining how ONDC will help create a level playing field, industry experts say the platform could prove to be hugely disruptive. “What most first-generation e-commerce players have taken eight or nine years to achieve, this kind of architecture should be able to emerge in maybe half as long as a lot of things have already happened. fell into the right place,” said Sushma Kaushik, Partner. The capital Aavishkaar. “It’s not like the local kirana dealer isn’t digitally aware. There are digital transactions going on where they may feel disadvantaged because they don’t have a digital sourcing channel or they can’t capture customers online. ONDC will be effective in solving that part of the problem. ”

While such merchants are already very familiar with the digital ecosystem, Kaushik adds, finding the right set of buyers and sellers, fulfillment agents and other players is a challenge. perennial subject to them. “So we have about 12 million kirana stores, of which I believe there are very few that actually buy and sell online. That number will really skyrocket when something like this comes into effect. And that’s where we’ll see the ‘Aha’ moment,” she added.

One more word of warning, experts state that while democratizing technology is a powerful story, adopting a principled approach will be critically important. Amar Shankar Partner-Consulting, EY, points out that the roles of government and the community are extremely important while implementing such a system. “It is necessary to ensure that data privacy is ensured with the right amount of anonymization security protocols and the corresponding development of the network. We have many more examples of health platform, digital ID, Aadhaar. etc. So I think a lot of opportunities exist. But we just have to be a little careful from an implementation standpoint,” he added.

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