The Amazon empire at risk due to an Indian initiative

New Delhi, Jun 23 (EFECOM).- India seeks to put an end to the exclusive power held by a few companies in the e-commerce sector such as Amazon, replacing the traditional vision of a website managed by an intermediary, with an open network that hosts to buyers, sellers and distributors without third party interests.

In the sights of its promoters is the low penetration of electronic commerce in India, where they estimate that around 90 million people are regular users, a figure that does not do justice to the second most populous country in the world with more than 1,350 millions of inhabitants.

Doing something different from what the big companies have been doing is the only way for these figures to increase, say those responsible for the Open Network for Digital Commerce (ONDC) project, who say that it will democratize the sector by favoring the jump to virtual commerce of the small companies, to which it will grant the same visibility as larger businesses.

E-commerce in India is expected to reach 74.5 billion dollars in turnover by the end of this year, according to estimates by the Foundation for Equity in India, under the Ministry of Commerce, and is expected to increase to 350,000 million dollars in 2030.

DIGITAL FEUDALISM

Today’s companies «are feudal lords with an incentive to show the buyer what they want and not what the buyer wants,» T. Koshy, executive director of the ONDC project, which began its pilot phase in five Indian cities in the middle of the year, told Efe. of April.

On the other hand, the ONDC, indirectly controlled by the Indian government and created non-profit, «does not owe loyalty to anyone, so it will try to help you choose faster by asking you intelligent questions, without trying to influence you,» he stressed.

Although the initiative is taking its first steps, in a kind of beta phase to learn from mistakes that may be made, the goal is to gradually expand its action radar until it is present in a hundred Indian cities in August.

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The main difference between this network and the giants of electronic commerce such as Amazon or Flipkart is that the ONDC does not have its own interface, thus escaping «web-centrism», as Koshy calls it, so to access it just search for the desired product on any of the platforms that make it up.

In addition, when the consumer performs a search on the application or website of one of the participants in the ONDC, they will not only be shown the products of said business, but also those of any other that is part of it.

Without a pre-established order, which will depend on the filters chosen by the consumer, the services of a large company will appear alongside those offered by a small business, giving both the same chances of being selected.

«Before, the intermediary was a source of power, because with all the information he could say to the seller ‘if you give me some extra money I can raise you’. That is the fundamental change,» warned Koshy.

A turn of the tables with which they intend to put an end to the opacity that characterizes the giants of electronic commerce, and that according to the vice president of strategic projects of ONDC, Rahul Handa, will contribute to multiplying by three, up to 250 million people, the number of e-commerce consumers in India.

«The reason the ONDC exists is to democratize trade,» he said.

Currently, the network includes seven companies that cover sectors as varied as food, health, or agriculture, among others, and the idea is that it will end up offering a wide variety of products, including the sale of plane or train tickets.

AMAZON INTEREST

Despite setting itself up as an alternative to Amazon or Flipkart, the promoters of the ONDC avoid referring to these platforms as competition, and instead say that Amazon has already shown interest in the project, in view of a potential adhesion.

«We are having conversations with them (…), it would be good news both for us and for them. For them because they would have access to a much larger network, and for us because the addition of any important brand adds to the credibility of ONDC,» the network’s business director, Shireesh Joshi, explained to Efe.

However, the Indian government doubts that this interest from the e-commerce giant really exists, and trusts that the development of the initiative, which they indirectly control 50% of, will initiate a transfer of Amazon customers to their network in the future.

«The seller wants to have as many customers as possible. Now, if he is on Amazon, he only gets customers who are on Amazon. If he is on ONDC, he gets customers from all areas,» the additional secretary of the Indian Ministry of Commerce, Anil, explained to Efe. Agrawal.

In charge of the project, Agrawal insisted on the non-profit character of the ONDC, of ​​which he points out that after an initial investment of 1.3 million dollars, it has already raised enough money to sustain itself for the next few years.

This allows them, he continued, to charge a fee «very small in each transaction that occurs in the network», but that will not be implemented until it is negotiated with the members of the network once the test phase progresses.

«We are taking special steps to build trust in the system. (…) Unless there is trust, no one will come here,» Agrawal concluded.

Hugo Barcia

(c) EFE Agency