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Onboarding of e-commerce giants crucial to ensure success of ONDC

When Open Community for Digital Commerce (ONDC) was conceived final December, the concept was to cut back the dominance of e-commerce giants like Amazon and Flipkart. It was additionally to herald a level-playing subject for small retailers in India’s fragmented however fast-growing $1-trillion retail market.

Nonetheless, these objectives have modified now as giant e-commerce gamers equivalent to Flipkart, Amazon and Ecom Categorical are in numerous ranges of talks with the ONDC staff.

They wish to kind partnerships like integrating with the community in addition to offering their experience to construct it, based on the business sources.

Nonetheless, none of those giant gamers have introduced their giant purchaser or vendor community to ONDC but.

There are additionally gamers equivalent to Google and Reliance-backed Dunzo, Paytm, PhonePe and Reliance Retail-owned logistics firm Seize, that are becoming a member of ONDC to offer numerous companies.

“ONDC was initially projected as a platform to take on Amazon’s and Flipkart’s of the world to reduce their dominance and democratise e-commerce in India,” mentioned an business supply.

He added, “Now, ONDC is in talks with Flipkart, Amazon and others to form various partnerships for building the platform.”

Amazon is participating with ONDC to offer its experience. It took the agency a decade and an funding of over $6.5 billion to construct its e-commerce infrastructure and belief amongst shoppers.

The corporate has mentioned it’s utterly dedicated to the federal government’s imaginative and prescient of digitisation, which incorporates kiranas, native shops, and small and medium companies.

Nonetheless, it’s ready to get readability concerning the structure of the ONDC platform. “Once there is clarity about the architecture, you would find Amazon partnering with as many solutions as possible,” mentioned the particular person.

Amazon’s chief rival Flipkart can also be working with ONDC to combine its provide chain logistics arm, eKart. “eKart will be one of the supply chain partners for ONDC,” mentioned an individual conversant in the event.

“India is creating digital platforms that are open, inclusive and universal. And, that creates more opportunities,” mentioned Nandan Nilekani, chairman of Infosys and a member of ONDC’s advisory council.

The intention is to extend the gross merchandise worth (GMV) of digital transactions from Rs 4.5 trillion yearly to over Rs 7.5 trillion. It is usually to develop protection of outlets utilizing digital commerce from 15,000 to greater than 2 million within the subsequent 5 years. It desires to develop the variety of Indians utilizing e-commerce from 90 million customers to over 250 million.

Consultants, nevertheless, level out that the true success of ONDC will solely occur when the big e-commerce gamers be a part of the community.

“Getting the larger players on the platform or not getting them will change the growth trajectory of ONDC. If Flipkart and Amazon, for some reason decide not to join the platform, then ONDC will take a longer time to scale up,” mentioned an business veteran whose firm is already part of the ONDC.

A current JM Monetary report (ONDC: Disruption or Evolution) highlights this level nicely. “ONDC’s proclaimed focus is on prioritising the local sellers and not the buyers. However, the problem isn’t really on consolidating supply as there are a larger number of local retailers and MSMEs that can be on-boarded. The tougher problem will be getting the buyers to switch to transacting via ONDC without any incentives or discounts,” mentioned JM Monetary.

The opposite problem is to what extent the bigger e-commerce gamers would share their information, algorithms or shopping for behaviour for higher itemizing.

At present, the ONDC framework limits information utilization and storage. Assuming that separate buy-side and sell-side apps are a part of the transaction, the patron information might reside with the buy-side app. That is technically not anticipated to affect the pricing or stock whereas the sell-side app might not get entry to shopper behaviour, together with conversion charges.

“However, true interoperability will only be achieved when data exchange is enabled,” mentioned JM Monetary.

Consultants additionally mentioned the query arises of how a vendor can profit by itemizing on the platform and what’s the motivation for patrons to buy on ONDC. Trade sources mentioned the important thing to that’s to offer a aggressive worth and a variety of selection for merchandise. The platform additionally has to create belief that the product is real and has a dependable supply mechanism. This could take a few years to get fashioned.

“If a consumer is planning to buy an iPhone, what would encourage him or her to buy it on ONDC, instead of Amazon or Flipkart, which are selling it at competitive prices?” requested an official at an e-commerce agency. Additionally, when a shopper searches for a product like a cell on ONDC community, how would the outcomes be displayed?

Platforms equivalent to Amazon and Flipkart showcase merchandise based mostly on numerous filters equivalent to worth and recognition.

If ONDC’s intention is to democratise e-commerce, will it showcase the product of a small vendor first as an alternative of a giant e-commerce agency?

Additionally, corporations equivalent to Amazon, Flipkart, Meesho, Reliance and Tata have their very own codes.

“How would ONDC ensure all of them have the same language and the search result is true and fair,” requested an govt of certainly one of these companies.

The opposite massive query that wants a solution is ONDC’s monetary viability: Will ONDC additionally take the trail that UPI took of zero per cent service provider low cost charge?

“So far there is no commission or charge that ONDC is taking, but it will do so in future. How much would it be and will it then derail the entire initiative?” requested a senior e-commerce govt.

Salman Waris, managing accomplice at expertise regulation agency TechLegis Advocates & Solicitors, nevertheless, mentioned, ONDC will encourage small retailers to undertake e-commerce and be a part of the web market. “This would result in bringing separate buyer-centric and seller-centric apps that will be beneficial for anyone who is invested in e-commerce,” mentioned Waris. The Nations

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