Tech Pioneer Nandan Nilekani Collaborates With Govt To Take On Amazon, Walmart In India
A not-for-profit system that goes by the name of Open Network for Digital Commerce, which allows small retailers to plug in and gain the reach and economies of scale of giants
New Delhi: Nandan Nilekani, Infosys co-founder who went ahead to spearhead Aadhaar, has one more ambitious goal in his kitty.
According to a report in Bloomberg, Nilekani (66), the high-profile tech mogul, is now helping the central government build an open technology network. This technology seeks to level the playing field for small traders in the country’s fragmented but fast-growing $1 trillion retail market.
The main aim is to create a freely accessible online shopping system where merchants and consumers can buy and sell everything from 23-cent detergent bars to $1,800 airline tickets.
What is unspoken here is to eventually curb the powers of Amazon and Walmart-owned Flipkart, whose online domination has alarmed small merchants and millions of kirana strores that form the nation’s retail backbone.
The kirana stores are fearful about their uncertain future as the two global e-tailers invested a combined $24 billion into the country and captured almost 80 per cent of the online retail market with aggressive discounts and promotional offers.
To address the concern, not-for-profit system that goes by the unwieldy name of Open Network for Digital Commerce, or ONDC, comes to the picture.
This system allows small retailers to plug in and gain the reach and economies of scale of giants.
What the government aims is to create its own e-commerce ecosystem for everyone. It will be designed to loosen the stranglehold of firms such as Flipkart, Amazon that dictate which brands get access to prime consumers and on what terms.
Nilekani recently said, “It’s an idea whose time has come. We owe it to the millions of small sellers to show an easy way to participate in the new high-growth area of digital commerce.”
Five cities have been selected for a pilot of the not-for-profit, government-run network, which is set to be rolled out next month.
Private lender ICICI Bank and state-owned Punjab National Bank and State Bank of India have bought stakes in the entity.
An Amazon spokesman told the news agency that they’re trying to better understand the model to see if the Seattle-based company has a role to play. Flipkart, however, didn’t respond to Bloomberg request seeking comment.
Nilekani, in his previous avatars, helped the government develop the Aadhar biometric ID system and also helped introduce a payments backbone called the United Payment Interface (UPI).
He has been hired as an adviser to ONDC last summer. Nilekani wants to do for e-commerce what UPI did for digital payments.
If successful, the e-commerce grid could help lakhs of small businesses go online and worry less about the global giants.
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