January 30, 2023

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The Amazon empire is in danger due to Indian initiative

© Reuters. The Amazon empire is in danger due to Indian initiative

Hugo Parsia

New Delhi, June 23 (.) .- India seeks to put an end to the exclusive power of a few companies in the field of e-commerce such as Amazon (NASDAQ :), which is an open network that welcomes buyers, sellers and distributors without third party interests instead of the traditional view of a website managed by an intermediary .

In the eyes of its advertisers India has the lowest penetration of e-commerce, with an estimated 90 million people being regular users, which is not fair to the world’s second most populous country with a population of over 1,350 million. Residents.

Those in charge of the Open Network for Digital Commerce (ONDC) program say the only way to increase this number is to do something different than what big companies are doing, which they say will democratize the industry by supporting the move to virtualization. Business of small companies, which provide the same visibility as large businesses.

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

Digital feudalism

Today’s companies are “landlords who encourage the buyer to show what they want, not buy what the buyer wants,” D.C. Koshy, Managing Director of the ONDC Project, launched its pilot phase in five Indian cities in the middle of the year. , April Efe. Said.

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ONDC, on the other hand, is indirectly controlled by the Government of India and is non-profit, “does not have to be loyal to anyone, so it will help you make intelligent choices and make quick choices without trying to influence you.” He insisted.

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

The main difference between this network and the e-commerce giants like Amazon or Flipkart is that ONDC does not have its own interface, thus escaping “web-centrism” as Koshi calls it, so find what you want to access. Product on any site that makes it.

In addition, when consumers search the ONDC for one of the participants’ application or website, not only the products of the business they are told about, but also the products of others who are part of it are displayed.

Depending on the filters that the consumer chooses, without a pre-installed order, the services of a large company will appear with the services provided by the small business, which offers the same opportunities for selection.

“Previously, the mediator was a source of power because with all the information he could tell the seller ‘I can raise you if you give me a little extra money.’ That is the fundamental change,” Koshy warned.

A twist on the tables they intend to put an end to the opacity that characterizes e-commerce giants, and according to Rahul Honda, Vice President of Strategic Plans, ONDC, the number of e-commerce consumers in India will triple, to 250 million.

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“The reason ONDC exists is to democratize trade,” he said.

Currently, the network includes seven companies covering various sectors such as food, health or agriculture, and it offers a wide variety of products, including the sale of air or train tickets.

Amazon interest

Although it sets itself up as an alternative to Amazon or Flipkart, ONDC’s advertisers avoid referring to these sites as competitors, instead claiming that Amazon is already interested in the project.

“We are talking to them (…), which is good news for us and for them. Because they have access to a very large network, it also adds to us the inclusion of any important brand. The credibility of ONDC,” Shirish Joshi, business director of the network, explained to Efe.

However, the Indian government doubts whether this interest from e-commerce really exists, and hopes that the development of this initiative, which indirectly controls 50%, will transfer Amazon customers to its network in the future.

“The seller wants to get as many customers as possible. Now, if he is on Amazon, he will only get customers on Amazon. If he is on ONDC, he will get customers from all regions,” said Anil, Efe, Additional Secretary, Ministry of Commerce, India. Explained to Agarwal.

In charge of the project, Agarwal stressed the non-profit nature of ONDC, in which he pointed out that after an initial investment of $ 1.3 million, he had already raised enough money to sustain himself for the next few years.

This allows them to charge a fee that is “the smallest of every transaction that takes place on the network”, but will not be implemented until the testing phase is advanced and negotiated with network members.

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“We are taking special measures to build trust in the organization. (…) Without confidence, no one will come here,” Agarwal concluded.

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