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Bengaluru: Ecommerce majors including Flipkart, Reliance Retail and Amazon are in talks to join the country’s ambitious Open Network for Digital Commerce (ONDC), multiple people in the know told ET, even as the network’s pilot programme to on-board kiranas and small and medium businesses gets underway in Bengaluru and four other cities.
ONDC, which still is at a nascent stage, is being pitched as a solution to break the dominance of large ecommerce firms like Walmart-owned Flipkart, Amazon and others in India. Hence, any move by these players to join and integrate with the open network assumes huge significance.
Flipkart’s logistics arm Ekart and
Retail-backed Dunzo have already integrated with ONDC for logistics services while PhonePe, which is also owned by Flipkart and Walmart, is joining the network and is in advanced stages of integration, these people said.
is already a part of the network, the added.
“The bigger ecommerce players have indicated to ONDC that they will support it. Besides tapping into new users, this will also enable platforms with sizeable business-to-business verticals to tap into the seller side of ONDC network to supply goods,” one of the people cited above said.
Paytm, PhonePe are likely to offer real estate to ONDC on their platforms through which users can log into the network, sources added.
“The existing large etailers work with a captive set of users. With an open network, ONDC will enable all the buyers in the network to be discoverable to all the sellers. Therefore, existing platforms (too) will have an incentive to be part of ONDC,” Thampy Koshy, CEO of ONDC told ET.
Thampy Koshy, CEO of ONDC
He declined to comment on specific names of large ecommerce and logistics firms joining the network.
A PhonePe spokesperson confirmed that the company will join the ONDC network on buyer and seller sides. “Just like UPI, we want to build on an open ecosystem like ONDC while leveraging our payment relationship with merchants as well as consumers. This will help our merchant partners grow their business. In terms of timelines, we are actively working with ONDC to launch as soon as possible,” PhonePe told ET in a statement.
“We are closely engaging with the ONDC team to better understand the proposed model and evaluate the role Amazon can play to better serve Indian customers and sellers,” an Amazon India spokesperson told ET.
Emails sent to other companies mentioned above did not elicit a response till press time Wednesday.
“Key logistics (providers) are already there. Now, they are waiting for orders and want to see how it is executed,” another person aware of the integrations said.
Koshy said the network aims to scale its presence in about 100 cities by August and it will also be opened to the wider public in five cities — Bengaluru, New Delhi, Coimbatore, Bhopal and Shillong — where the pilot is underway. The network is currently in the “beta testing” phase with just five sellers onboard and a limited set of buyers from five cities.
“By the first week of June, we want to make it available to the broader public in these five cities. By August, we want to be there in 75-100 cities and by the end of the year we should be there across the country,” he said, explaining the roadmap for the network.
ONDC CEO was in Bengaluru earlier this week to talk to various stakeholders at an event organised by Synergia Foundation.
The network aims to on-board small sellers and some expect it to have the impact on ecommerce similar to what the Unified Payments Interface (UPI) had on digital payments. It is a “decentralised” play without the need for customers and sellers to be on one platform.
Illustration: Rahul Awasthi
“The open protocol enables discovery, ordering, execution, fulfilment, and post-fulfilment without mandating the provider and consumer to come to the same platform,” says a strategy paper issued by ONDC, which has been reviewed by ET.
ONDC is also educating key stakeholders, including online merchants, that visibility on the network won’t be influenced by certain algorithms by ecommerce platforms — a growing concern among online sellers. Ecommerce firms maintain their algorithms do not treat sellers in a discriminatory manner while favouring others.
Execution holds key
Industry executives are of the view that the effectiveness of ONDC will depend on its execution. The network will connect buyers to sellers and depending on the latter’s arrangement products will be shipped. “A seller can do logistics on her own or the customer can be told to Dunzo it-like other tasks performed on the app,” said a person aware of the current operating model of ONDC.
Ecommerce veterans point out that this is not as easy as it sounds. “Especially, when there is a dispute between consumer and the seller on orders. What role does the logistics partner have in this case? These are many questions that need to be answered once it is opened to the public,” an executive said.
Online merchants who sell on Amazon and other online marketplaces said they were excited about the opportunity, and are keen to see how this is executed on the ground.
“There are still some teething issues which will only be visible once the execution starts,” said a seller aware of ONDC’s work. “There is no clarity yet on how the cataloguing will be done or how the advertisement technology, which Amazon does really well, will work out in ONDC. I will definitely be a part of it, because I don’t want to miss the bus in case the technology takes off.”