Amazon is “excited” about Open Network for Digital Commerce’s prospects in India’s still nascent e-commerce market, said its country director for India Consumer Business Manish Tiwary, describing the network as an intriguing idea.
Opinions are gaining momentum as the government in April this year launched the pilot phase of India’s own Open Network for Digital Commerce or ONDC, an UPI-like protocol, in five cities with the ambitious project aimed at democratizing the growing electronic commerce. sector, helping small retailers and reducing the dominance of online retail giants.
Asked about his views on ONDC, Tiwary said the company is looking forward to innovations, which will lift all boats in the ecosystem and bring more buyers and sellers online, as it focuses on the serving the next 500 million customers.
“I am focused on serving the next 500 million customers. Therefore, I look forward to innovations, which will lift all boats in the ecosystem,” Tiwary told PTI in a recent interaction.
Regarding the impact of ONDC on the business models of established e-commerce players, such as Amazon, Tiwary pointed out that e-commerce in India is still in its infancy.
“If you look at categories like groceries, fashion…I mean groceries is about 50% of the shopping cart…e-commerce wouldn’t even be in the single digits…in terms of penetration,” Tiwary said.
The issue of threat arises where penetration levels are much higher, he added.
“So things threaten you when you have, say, 90% penetration and everyone is using it… at this point, think of any industry in its infancy… the more there is innovation, the more players there are, the faster the industry accelerates,” said Tiwary.
Saying he is often asked if the ONDC would threaten Amazon, Tiwary said the company is focused on serving the next set of customers.
“So if ONDC, at scale, manages to reach 200 million sellers, that’s great. Because you’re incentivizing people to then sell digital. So that’s the bottom line. It’s not about threaten, we’re in an early stage of … I call it infancy, in that sense,” Tiwary noted.
ONDC is a “very fascinating idea”, he said, adding that it is about creating an open network where various service providers “fit together like a puzzle” and the consumer and seller have that choice. .
“At this stage, we are engaging very closely with the ONDC group, and we are quite committed to what the government wants to do, which is to digitize the kiranas, the convenience stores… I spoke of some of our initiatives, which even pre-date ONDC… So yeah, excited about what it can do. It’s a nascent industry, we’re going to be working closely with the government,” he said. he declares.
Amazon comes with a deep understanding of the technology and the sellers it will leverage, the official added.
So far, seven companies, including one buy-side application and five sell-side applications, have adopted ONDC protocols and created their own ONDC-compatible applications, the Ministry of Trade and Industry said Thursday. The pilot phase of the network is currently underway in Bengaluru, New Delhi, Bhopal, Shillong and Coimbatore.
Market watchers say existing online shopping platforms operate independently and operate with tight controls, leaving many smaller players out of the equation.
ONDC goes beyond the current platform-centric model of digital commerce, where buyer and seller must use the same platform or application to be digitally visible and complete a commerce transaction. The ONDC will therefore stimulate competition and encourage the innovation of startups.
The ONDC should make e-commerce more inclusive and accessible to consumers. Consumers can potentially discover any seller, product or service using any compatible app or platform, increasing freedom of choice.
Tiwary said Amazon was bullish on the Indian market, where it has made strong commitments on job creation, exports and digitization of MSMEs.
In May this year, Amazon announced that it had created a total of over 11.6 lakh direct and indirect jobs, enabled nearly $5 billion in cumulative exports, and digitized over 40 lakh MSMEs in India.
In January 2020, the American e-commerce giant pledged to digitize 1 crore MSMEs, enable USD 10 billion in cumulative exports and create 20 lakh jobs in India by 2025.
Amazon had said it was on track to deliver on those promises, while effectively doubling its export pledge from India, to now enable $20 billion in cumulative exports from the country by 2025.
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