Bengaluru: Ecommerce giants Flipkart, Reliance Retail, and Amazon are in talks to join India’s ambitious Open Network for Digital Commerce (ONDC), according to multiple sources familiar with the matter. The network’s pilot programme to onboard kiranas and small and medium businesses is currently underway in Bengaluru and four other cities.
ONDC, which is still in its early stages, is being marketed as a way to challenge the dominance of giant ecommerce companies such as Walmart-owned Flipkart and Amazon.
Ekart, Flipkart’s logistics subsidiary, and Reliance Retail NSE -2.04 percent According to these insiders, Dunzo has already connected with ONDC for logistics services, and PhonePe, which is also owned by Flipkart and Walmart, is joining the network and is in the advanced phases of integration. Paytm is already a part of the network, according to the company.
“The larger ecommerce firms have told ONDC that they will back it.” “This would enable platforms with large business-to-business verticals to access into the seller side of the ONDC network to provide items, in addition to tapping into new consumers,” one of the sources listed above stated.
According to insiders, Paytm and PhonePe are expected to give ONDC real estate on their platforms via which customers may join into the network.
“The existing huge etailers have a captive audience. With an open network, ONDC will make all of the network’s buyers discoverable to all of the vendors. As a result, current platforms will be motivated to join ONDC,” Thampy Koshy, CEO of ONDC, told ET.
He wouldn’t say which significant e-commerce and logistics companies are joining the network.
On the buyer and seller sides, a PhonePe spokeswoman confirmed that the company will join the ONDC network. “Like UPI, we aim to build on an open ecosystem like ONDC while using our merchant and customer payment relationships.” This will assist our merchant partners in expanding their operations. In terms of timescales, we’re working closely with ONDC to launch as soon as feasible,” PhonePe said in a statement to ET.
“We’re working closely with the ONDC team to better understand the proposed model and assess how Amazon might help Indian customers and sellers,” an Amazon India official told ET.
Emails submitted to the other firms indicated above received no response as of Wednesday press time.
“Key logistics (suppliers) have already arrived.” They’re waiting for orders now and want to see how it’s done,” said another person familiar with the integrations.
According to Koshy, the network plans to expand to roughly 100 cities by August, and it will also be made available to the general public in five cities where the test is taking place: Bengaluru, New Delhi, Coimbatore, Bhopal, and Shillong. The network is now in “beta testing” mode, with only five merchants and a small number of customers from five locations on board.
“We intend to make it available to the general public in these five cities by the first week of June.” We hope to be in 75-100 cities by August, and by the end of the year, we should be all across the country,” he stated, outlining the network’s timeline.
The ONDC CEO was in Bengaluru earlier this week to speak with various stakeholders at a Synergia Foundation event.
The network intends to onboard small merchants, and some predict that it will have a similar influence on ecommerce as the Unified Payments Interface (UPI) did on digital payments. It’s a “decentralised” game that doesn’t require buyers and merchants to be on the same platform.
“The open protocol enables discovery, ordering, execution, fulfilment, and post-fulfillment without requiring the supplier and customer to use the same platform,” according to an ONDC strategy paper that ET read.
ONDC is also informing important stakeholders, such as online merchants, that network visibility will not be impacted by ecommerce platforms’ algorithms – a rising worry among online sellers. Ecommerce companies claim that their algorithms do not discriminate against vendors while favouring others.
Execution is crucial.
The efficacy of ONDC, according to industry insiders, will be determined by how well it is implemented. The network will connect customers and sellers, and things will be transported based on the latter’s arrangements. “Like other jobs conducted on the app, a seller may undertake logistics on her own or the client can be ordered to Dunzo it,” according to someone familiar with ONDC’s current working model.
Ecommerce experts point out that it’s not as simple as it appears. “Especially when there is an order disagreement between the customer and the supplier. In this situation, what function does the logistics partner play? “Once it’s accessible to the public, there will be a lot of questions to address,” an executive said.
Online merchants that sell on Amazon and other online marketplaces are enthusiastic about the prospect and eager to see how it is implemented in practise.
“There are still some teething concerns that will only become apparent once implementation begins,” a source familiar with ONDC’s work said. “There is little clarity yet on how cataloguing will be done or how Amazon’s excellent ads technology will work out in ONDC.” I’m absolutely going to be a part of it because I don’t want to lose out if the technology takes off.”
