Amazon joins India-backed e-commerce initiative seeking to challenge retail giant

Amazon is joining the Indian government-backed e-commerce initiative that aims to “democratize” online shopping in the South Asian market and playfully challenge the very dominance of companies such as the US retail group.

In a statement on Friday, Amazon said it would integrate its logistics network and SmartCommerce, its neighborhood store digitization platform, with Open Network for Digital Commerce, a non-profit corporation set up by India’s Ministry of Commerce in 2021. .

“Amazon’s vision and commitment to India is closely aligned with ONDC’s goals of digitally empowering small businesses and providing convenience and choice to customers across the country,” said Manish Tiwary. , Country Director of Amazon India, in a statement.

Amazon’s participation in the initiative, backed by the Indian government, is notable because part of ONDC’s discourse to date has been that it seeks to disrupt Amazon’s and Walmart’s Flipkart monopoly on the Indian e-commerce market.

ONDC is an “interoperable” network, where buyers and sellers can conduct business regardless of the app or services they use, disrupting consumer reliance on using proprietary services operated by Amazon and Walmart.

With ONDC, New Delhi seeks to replicate the success it has had with UPI, the interoperable mobile payment network, which has disrupted the closed mobile wallets of companies such as Paytm and MobiKwik. Paytm is a member of the ONDC network.

And although these are the early days of the ONDC, the model still has a lot to iron out, say industry executives.

It is unclear who bears the responsibility if a customer does not receive his order, for example. And unlike UPI, which saw New Delhi aggressively promote the digital payment network, ONDC received little public acclaim and support.

“We are happy that Amazon has a defined roadmap to be part of the ONDC network and is taking its first step by becoming the logistics partner of the ONDC network, a globally pioneering idea established with a view to democratizing digital commerce in India” , said T Koshy, MD and CEO of ONDC, in a statement.