Amazon joins Indian e-commerce initiative that seeks to challenge Amazon

Amazon is joining the Indian government-backed e-commerce initiative that seeks to "democratize" online shopping in the South Asian market and amusingly challenge the very dominance of companies such as the American retail group.

In a statement on Friday, Amazon said it will integrate its logistics network and SmartCommerce, its platform to digitize neighborhood stores, to Open Network for Digital Commerce, a nonprofit firm set up by India’s commerce ministry in 2021.

“Amazon’s vision and commitment for India is closely aligned with ONDC’s objectives of digitally enabling small businesses, and providing convenience and choice to customers across the country,” said Manish Tiwary, country manager for Amazon India, in a statement.

Amazon’s participation in the initiative, backed by the Indian government, is remarkable because part of the ONDC pitch to date has been that it seeks to disrupt the monopoly of Amazon and Walmart’s Flipkart in the Indian e-commerce market.

ONDC is an “interoperable” network, where buyers and sellers can do business regardless of the app or services they use, disrupting the consumers’ reliance on using proprietary services run by Amazon and Walmart.

With ONDC, New Delhi is seeking to replicate the success it has had with UPI, the interoperable mobile payments network, that disrupted the walled-garden mobile wallets from firms such as Paytm and MobiKwik. Paytm is a participant in the ONDC network.

And while it’s early days for ONDC, the model has many things left to iron out, industry executives say.

It’s unclear who bears the responsibility if a customer doesn’t get their order delivered, for instance. And unlike UPI, which saw New Delhi aggressively promote the digital payments network, ONDC has received little public praise and support.

“We are happy that Amazon has a definite roadmap to being a part of the ONDC network and is taking its first step in coming in as the logistics partner in the ONDC network which is a globally pioneering idea established with a view to democratise digital commerce in India," said T Koshy, MD and CEO of ONDC, in a statement.