On Friday, the Indian government is expected to launch an open network for digital commerce (ONDC) in an effort to challenge the dominance of American giants Amazon.com and Walmart in the rapidly expanding e-commerce sector. On Thursday, India’s antitrust agency searched Amazon and several of Walmart’sFlipkart’s local vendors on charges of violating competition legislation. Requests for comment on the raids were not answered by the firms concerned.
Amazon and Flipkart have long been accused by Indian merchants, many of whom support Prime Minister Narendra Modi, of favoring a small number of large sellers via predatory pricing, despite the fact that both businesses claim to be fully compliant with all Indian regulations. Customers and sellers would be able to connect and transact online via the government’s ONDC platform, no matter what other program they use. The commerce ministry said it will begin with a limited rollout on Friday before expanding.
Over half of all online sales in the country were controlled by just two huge, international companies, according to a government document. This limited competition gave sellers preferential treatment and squeezed margins for suppliers. It did not identify the businesses. Requests for comment on ONDC were not immediately returned by Amazon or Flipkart. An official document said that India’s ONDC strategy was targeted at onboarding 30 million online retailers and 10 million merchants. By the end of August, the goal is to reach at least 100 cities and towns. As a result of this, the paper said that the initiative will target applications in local languages for both buyers and sellers, with a specific emphasis on small businesses and rural customers.
Retailers and venture capital companies, according to the government, have already offered their assistance. A total of 2.55 billion rupees ($33.26 million) has already been invested in ONDC by lenders such as the State Bank Of India, ICICI Bank, and Bank of Baroda (SBI). Last year, an investigation by Reuter’s based on Amazon’s internal papers revealed that the business had provided preferential treatment to a tiny number of vendors on its platform for years and had exploited them to circumvent Indian legislation. Any misbehavior by Amazon is untrue. This will benefit the Indian People due to online purchases of products.
150 merchants would be onboarded during the trial run in Delhi-NCR, Bangalore-Coimbatore-Bhopal-Shillong.
Retailers will benefit from ONDC’s three most significant features: dynamic pricing, inventory management, and cost-optimization of delivery.
On the 31st of December 2021, ONDC got its certificate of formation as a non-profit organization headed by the private sector.
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ONDC has already partnered with a number of well-known firms.
Nandan Nilekani from Infosys and CEO R S Sharma of the National Health Authority are among the nine members of a government advisory committee tasked with determining how ONDC should be designed and implemented.
Customers may now use any ONDC-compatible application or platform to find any vendor, product, or service, which gives them more freedom of choice.
For the time being, e-commerce is mainly benefiting the larger firms, leaving the smaller ones behind.
ONDC guidelines, according to Anil Agrawal, an assistant secretary in the Department of Promotion of Industry and Internal Trade, would standardize all activities, including cataloging and inventory management.