India’s new ecommerce system, explained

India’s Open Network for Digital Commerce could make ecommerce easier for smaller sellers. Would it work elsewhere?

It’s $8 from Target, but $6 shipping. Amazon’s $12 with free shipping, but only with Prime. Wait, does the corner store have this? 

India’s new ecommerce system, explained

India’s Open Network for Digital Commerce (ONDC) is a government-backed initiative rolling out from five to 100 cities this month — proponents say it could revolutionize ecommerce.

India has an ecommerce duopoly… 

… in which Amazon and Walmart-owned Flipkart control 60%+ of the market, per Reuters, and can squeeze out little guys by limiting search results and favoring certain sellers.

ONDC isn’t a competing platform, but a network that platforms and sellers can join, with the goal of leveling the playing field for small businesses across retail, travel, food delivery, and other sectors. 

  • Customers get a one-stop shop. Searching for a shirt returns results and prices from all participating sellers, including local merchants. Unbundled services mean shoppers choose delivery providers.  
  • Businesses manage one online inventory but appear in searches across platforms. Commissions are capped at 3% — a tenth of what sellers often lose on large platforms, per Fortune.

Amazon and Flipkart are reportedly in talks to join, as is Google; Ekart, Flipkart’s logistics arm, already has.

Could this work elsewhere?

Billionaire and Infosys founder Nandan Nilekani told Fortune he hopes ONDC will “provide a glimpse for the whole world of how open commerce can drive positive non-zero-sum outcomes for business and society.”

2pm posits that, in the US, D2C retailers would benefit from increased visibility and spending less on Google and Meta ads, but wonders if the US could generate support — from the government and figures like Nilekani  — to make it happen. 

More: Nilekani discussed ONDC at Startup India Innovation Week 2022.

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