How India Plans to Reinvent E-Commerce with Amazon
The plans of U.S. Big Tech to expand abroad would be inherently threatened by success—or even a good attempt. It might also serve as a model for other developing countries that want to use the possibilities of digital payments, e-commerce, and other internet services without giving the reins to a select group of powerful technology companies.
The Open Network for Digital Commerce, also known as ONDC, was launched by the Indian government more than a month ago in Bengaluru, the nation’s technological centre. To weaken the hold of Amazon.com and Walmart-backed Flipkart, the ONDC is an interoperable network that attempts to assist small shops in emulating the reach of private e-commerce platforms. It will make it possible for all participating e-commerce platforms to display their goods and services in search results across all network apps. All of this occurs at a time when India has been vehemently pursuing antitrust cases against major American tech firms like Meta Platforms, Google, and Amazon. The future success of ONDC is still very much up in the air. However, the network’s inauguration clearly shows how India, the second-largest population in the world, is doing.
That contrasts sharply with the American model, which is based on natural monopolies and frequently relies on advertising revenue, and China’s heavily controlled and protected models. According to Morgan Stanley, ONDC might severely threaten well-known companies and platforms in industries like ride-hailing and food delivery. The bank claims that more than 30 businesses, including Reliance Retail, Paytm, and Google, are in active talks to align with ONDC. India Stack, a collection of software tools created by nonprofits and governmental organisations, is the foundation of this vision. Its goal is to enable safe identity verification, e-commerce, and payments for the whole population. As an illustration, almost 90% of Indians have now registered for Aadhaar, a biometric identity-verification system.
According to the International Monetary Fund, by 2019, around half had connected their bank account to their ID, allowing them to use India Stack’s Unified Payments Interface to conduct digital payments. The IMF points out that this has, in turn, aided in the growth of new businesses like Jio, the telco that has dramatically increased data availability throughout India. The Open Credit Enablement Network, which intends to codify a uniform set of credit standards for borrowers, lenders, and fintech intermediaries, is one of the additional components of the India Stack. Undoubtedly, there are many difficulties in developing a successful open architecture for e-commerce. People shop on websites like Amazon because the company makes investments to make sure its products are authentic and will arrive in good condition.
Customers have several options for remedies, including the courts, when things go wrong. It may be challenging to incorporate that level of responsibility and dependability into an open-access, decentralised network. Success, however, would pose a severe danger to the business models of powerful U.S.-backed digital commerce corporations like Amazon, mainly if components of India Stack were later exported to other sizable developing countries fearful of the influence of American tech titans. IT investors and their detractors in domestic and international government and civil society should keep a close eye on India Stack and ONDC.