There is a formidable unforeseen competitor in town, and it’s taking on companies across the board—e-commerce giants Amazon and Flipkart, home service marketplace Urban Company, hotel aggregators like OYO, cab aggregators Ola and Uber, social e-commerce companies like Meesho… basically, everyone. The competitor is the Indian government.
And unlike other industry competitors, the government isn’t driven by the usual trappings of business—be it capital, growth before revenue or valuations. It’s driven by keeping peace with traders and merchants, cab and auto-rickshaw drivers, home cooks and small restaurants, and hotel operators who are tied to the rules of corporate internet companies.
The ministry of commerce wants to loosen up these ties and return some agency to these professionals. In July, it set up a nine-member committee to oversee an Open Network for Digital Commerce (ONDC) to “democratise e-commerce”.
The ONDC follows the success of the government’s last tryst with an open tech interface—Unified Payments Interface or UPI, set up for real-time payments. Backed by India’s banking regulator, the Reserve Bank of India (RBI), UPI showed how not locking users or merchants into a single platform—via interoperability—can work at an exceptional scale scale Business Standard UPI logs record 3 bn transactions in July Read more . It has also shown the way for platforms like ONDC to try and build on top of open or freely available protocols.
“As UPI is to the digital payment domain, ONDC is to e-commerce in India. ONDC will enable buyers and sellers to be digitally visible and transact through an open network no matter what platform/application they use,” said the ministry ministry Press Information Bureau Go ahead for rapid development and deployment of ONDC Read more in a press release.
As per a committee member, ONDC aims to build “the world’s largest e-commerce platform” in terms of the number of sellers. It also wants to give regulators a breather by filling e-commerce holes like predatory pricing and deep discounting. “We will show the world how e-commerce is done,” Praveen Khandelwal, secretary-general of Confederation of All India Traders (CAIT) and committee member at ONDC, tells The Ken.
Of the 80 million traders in India, Khandelwal expects “at least 30% to come on board” initially. The ONDC platform, he says, should be up and running come 15 August 2022, India’s Independence Day. ONDC has not issued a timeline officially.
An example of how ONDC’s platform could play out is taking shape in Kerala. The Kochi Metropolitan Transport Authority launched a mobility app called Yatri for users to access different modes of transport in one place. The app went live in July with five taxi associations and nearly nearly The Hindu Over 1,000 drivers enrol with Yatri app in Kochi Read more 1,000 drivers onboarded.