Amazon India is working closely with the Indian government’s new e-commerce initiative Open Network for Digital Commerce (ONDC) to explore how it can integrate itself into it, according to Amazon India Country Manager (India Consumer Business) Manish Tiwary.
“ONDC is an innovation from the government to create a bigger pipeline, more buyers, more sellers and service providers. We are working closely with ONDC to see how we can integrate ourselves and make it successful,” he told Business Today on the sidelines of the MAPIC India 2022 event in Mumbai on Wednesday.
The government-backed Open Network for Digital Commerce, launched in April 2022, looks to leverage the country’s e-commerce market, currently dominated by US-based e-tailer Amazon and Walmart-backed Flipkart.
The initiative, supposedly similar to the government’s United Payments Interface (UPI) which has laid the foundation of the country’s digital payments ecosystem, is also seen as a challenger to the Amazon-Flipkart duopoly in the space.
The ONDC pilot is up in five cities-Delhi, Bangalore, Shillong, Coimbatore and Bhopal and has now been expanded to Lucknow and 12 other Indian cities. It expects to cover 100 cities by the end of 2022.
The platform is reportedly in talks with 200 companies to onboard them on the network.
This also comes against the backdrop of a boom in D2C brands, which sell directly to online buyers bypassing the traditional sales and distribution channels in retail. A house of brands concept, commonly called the Thrasio model, is also emerging in the country where players such as Mensa Brands and The Good Glamm Group are aggregating a number of these D2C brands.
“Yes, there is a Thrasio kind of model (which is emerging), and we work closely with these brands. Innovation is at the heart of e-commerce and each of these are new innovative ideas which different sets os people are trying and we are excited to pattern with all of them,” said Tiwary.
He also pointed out that e-commerce is a still small business in India, accounting for hardly 3 per cent of the retail marketplace. But it’s driving a lot of innovation and a lot of growth is coming from the smaller cities and towns of India. “80-85 per cent of my new customers are coming from these smaller towns,” he said at a panel discussion at the event.
The customer profiles and needs are exactly the same in smaller towns as in bigger cities, Tiwary added. “They also want a double-door fridge and they also want a selection which is as premium as you would sell in south Delhi or Bombay.”
The “explosive growth” is driven by the demand from shoppers from smaller cities and towns who also have sufficient income but haven’t had access to as many options as there are in the metros, he added. Business Today