As a participant in the ONDC experiment told me, the democratization Nilekani is seeking could end up playing the same role as the “Third Front” in Indian politics. One set of apps can let buyers search for products, another can allow sellers to upload their inventory and enable logistics players to offer their services. In theory, the idea of breaking up e-commerce looks nice. It’s just very hard in a country of India’s size and diversity to have the supply chain so well-primed that the exact thing the consumer wants is available in the neighborhood shop. Everyday staples have proved challenging, not only for pure e-commerce players but even for the Mumbai-based tycoon Mukesh Ambani’s massive network of mom-and-pop stores. Affluent customers go for the largest possible shampoo bottle, while poor families buy small sachets because that’s all they can afford. Vegetables are fresher in one shop, cheaper in another. When that assurance comes under a doubt, like during the recent US bank failures, authorities take extraordinary steps.Įverything other than money, however, is a little differentiated. The payments innovation succeeded because money enjoys a universal sameness - demand deposits are immediately convertible into a predefined amount of sovereign-issued cash, no questions asked. There will be no revolution.Īadhaar, the unique number used to authenticate people’s identity digitally, took off because the state put its coercive power behind it. Take that away, drop the subsidies on delivery charges and eliminate the incentives to sellers, and this is where the dust will likely settle - restaurants will get a slightly better deal than now, forcing Swiggy and Zomato to lower their commissions and improve service. (Good luck wooing millennials and Gen Z with that acronym.) The word-of-mouth popularity is largely due to a 50-rupees-per-transaction initial discount that the banks backing ONDC are funding. I remain skeptical of ONDC, and not only because of its clunky moniker. But Goyal has cottoned on to this, and threatened to exclude those e-commerce players that are not coming to the network with their main platforms. That’s perhaps why Walmart's PhonePe payments unit has designed Pincode, a custom-built app for hyperlocal shopping. Participating too vigorously might mean cannibalizing Flipkart, its main retail business. After all, the government’s open bazaar won’t stop at aggregating meal orders or auto-rickshaw rides. Paytm is getting behavioral data by seeing more of its users’ shopping transactions fulfilling those orders is not its headache. (Hat tip to Moneycontrol, which did the price comparisons recently.) Customers are discovering McChicken meals for 190 rupees ($2.30) on a fintech app like Paytm when the same thing is selling on Zomato Ltd.’s site for 204 rupees. In Bengaluru and New Delhi, thousands of online restaurant orders are bypassing Swiggy and Zomato, the two popular online food-delivery platforms. Those who don’t come on board now with their customer data will repent because, as TechCrunch quoted the minister as saying recently, at some stage “we will also have to cut off those who are left behind.”Īt least that’s where the project is at. The two American-owned market leaders, Walmart’s Flipkart marketplace and Amazon’s India shopping site, can expect the rhetoric to get louder as next year's general elections draw nearer. Commerce Minister Piyush Goyal says India will use the “full force of the government” to promote the open e-commerce network. The political bluster accompanying ONDC, however, is undermining the project’s economic promise. Within seconds, the customer sees a set of choices at a range of price points, along with transparent options for delivery modes, times, and costs provided by a choice of logistics operators. The network makes it possible for them to connect with thousands of sellers across the country who sell on ONDC via their preferred seller app. Buyers can tap into it using any participating app to launch a search for an item. Moving the diverse Indian bazaar of goods and services online democratizes digital commerce for buyers and sellers. ONDC presents an alternative to the existing platform-centric model. In a report with the consulting firm McKinsey & Co., ONDC, the non-profit that has emerged as a result of Nilekani’s advocacy and the government’s blessings, describes how it will expand this stunted landscape: Only a fraction of them garner meaningful business on platforms. Around 75% of Indians with internet access are not shopping online, while only 5 million out of the country’s 100 million micro, small and medium firms are registered to sell digitally. Meanwhile, Nilekani has shifted his gaze to e-commerce.
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