Amazon is “excited” about the prospects of Open Network for Digital Commerce in India’s still-nascent e-commerce market, its Country Manager for India Consumer Business Manish Tiwary has said, describing the network as a fascinating idea.
The views assume significance as the government in April this year launched the pilot phase of India’s own open network for digital commerce or ONDC, a UPI-type protocol, in five cities, with the ambitious project geared to democratise the fast-growing e-commerce sector, help small retailers and reduce the dominance of online retail giants.
Asked about his views on ONDC, Tiwary said the company is looking forward to innovations, which will lift all boats in the ecosystem and bring more buyers and sellers online, as it focuses on serving the next 500 million customers.
“I am focused on serving the next 500 million customers. Therefore, I look forward to innovations, which will lift all the boats in the ecosystem,” Tiwary told PTI during a recent interaction.
On the impact of ONDC on the business models of established e-commerce players, such as Amazon, Tiwary pointed out that e-commerce in India is still in its infancy.
“If you look at categories like grocery, fashion…I mean groceries is like 50 per cent of shoppers’ basket… e-commerce would not even be in single digits…in terms of penetration,” Tiwary said.
The question of threat comes where penetration levels are far higher, he added.
“So things threaten you when you have, say, 90 per cent penetration and everyone is using it…at this point of time, just think about any industry at infancy…the more the innovation, the more the players, the faster is the acceleration of the industry,” Tiwary said.
Stating that he is often asked the question of whether ONDC would threaten Amazon, Tiwary asserted that the company is focused on serving the next set of customers.
“So, if ONDC, at scale, manages to get to 200 million sellers, that’s awesome. Because you’re getting people to then sell digital. So that’s the overall thing. There’s no question of threatening, we are at an early stage of…I call it infancy, in that sense,” Tiwary noted.
ONDC is a “very fascinating idea”, he said, adding that it is about creating an open network where various service providers “sort of fit in like a jigsaw puzzle” and the consumer and the seller get that choice.
“At this stage, we are engaging very closely with the ONDC group, and we are quite committed to what the government is wanting to do, which is to digitise kiranas, local stores…I spoke about some of our initiatives, which are preceding even ONDC… So yes, excited by what it can do. It’s a nascent industry, we will work closely with the government,” he said.
Amazon comes with a deep understanding of technology, and sellers which it will leverage, the official added.
So far, seven companies, including a buyer-side app and five seller-side apps, have adopted ONDC protocols and built their own ONDC-compatible apps, the commerce and industry ministry said on Thursday. The network’s pilot phase is currently underway in Bengaluru, New Delhi, Bhopal, Shillong and Coimbatore.
Market watchers say that the existing etailing platforms work independently and operate with tight controls, leaving out many small players from the equation.
The ONDC goes beyond the current platform-centric digital commerce model, where the buyer and seller have to use the same platform or application to be digitally visible and do a business transaction. ONDC, therefore, will spur competition and encourage innovation by startups.
ONDC is expected to make e-commerce more inclusive and accessible for consumers. Consumers can potentially discover any seller, product or service by using any compatible application or platform, in the process increasing freedom of choice.
Tiwary said Amazon is bullish on the India market, where it has outlined firm commitments around job creation, exports and MSME digitisation.
In May this year, Amazon announced that it has cumulatively created more than 11.6 lakh direct and indirect jobs, enabled nearly USD 5 billion in cumulative exports, and digitised over 40 lakh MSMEs in India.
In January 2020, the US-based e-commerce giant pledged to digitise 1 crore MSMEs, enable USD 10 billion in cumulative exports and create 20 lakh jobs in India by 2025.
Amazon had said it is well on track to fulfil these pledges, while in fact doubling its export pledge from India, to now enable USD 20 billion in cumulative exports from the country by 2025.