Amazon joins an India-backed e-commerce initiative to challenge the retail titan

Amazon is joining the Indian government’s e-commerce program to “democratize” online shopping in South Asia and, amusingly, challenge the dominance of companies like the American retail conglomerate.

Amazon said on Friday that it will join India’s non-profit Open Network for Digital Commerce, which was started by the country’s commerce ministry in 2021. It will do this by connecting its logistics network and SmartCommerce, its platform for digitizing local retailers.

“Amazon’s vision and commitment for India are closely linked with ONDC’s aims of digitally enabling small companies and bringing convenience and choice to customers across the country,” said Amazon India country manager Manish Tiwary.

Amazon’s participation in the project, backed by the Indian government, is surprising because the ONDC’s pitch has been to break Amazon’s and Walmart’s (Flipkart’s) hegemony in the Indian e-commerce sector.

ONDC is an “interoperable” network where buyers and sellers can transact regardless of app or service, challenging consumers’ reliance on Amazon and Walmart’s proprietary services.

New Delhi hopes that ONDC will be as successful as UPI in making Paytm and MobiKwik’s mobile wallets less secure.ONDC includes Paytm.

Industry insiders said ONDC is still developing and has numerous issues to resolve.

If a customer’s order isn’t delivered, who’s responsible? ONDC, unlike UPI, has gotten little public appreciation and support.

“We are thrilled that Amazon has a clear way to join the ONDC network and is taking the first step to do so as a logistics partner in the ONDC network,” said T. Koshy, MD and CEO of ONDC. “This is a world-first idea that is meant to make digital commerce in India more accessible to everyone.”