Indian e-commerce was worth more than $55 billion in gross merchandise value in 2021 and will grow to $350 billion by the end of this decade, according to government estimates. Amazon and Flipkart control more than 60% of that market, which now accounts for about 8% of consumer purchases in a country of 1.35 billion people.
India is making an effort to break Amazon Inc (AMZN.O) and Walmart Inc’s (WMT.N) dominance of its e-commerce sector, by establishing its own open network, has begun lining up banks and other key players needed to move it forward, sources familiar with the matter said.
Some of India’s biggest banks are in discussions about setting up “buyer platforms” to let their customers place orders for goods and services over the Open Network for Digital Commerce (ONDC), which the Indian government soft-launched in April, the sources told Reuters.
The success of the network, which would promise equal access to all online sellers and buyers regardless of their size, is a priority for Prime Minister Narendra Modi, who faces pressure from small businesses to act against the outsized influence of Amazon and Walmart’s Flipkart in India’s e-commerce.
Policymakers in other countries as well are looking at ways to rein in big tech companies’ dominance of online purchases.
“If you look at the seller side, anybody who can make their digital catalog visible using this common language will have access to a large pool of buyers shared across apps,” ONDC Chief Executive T. Koshy said about the network. “It is no longer controlled by one large corporation.”
Koshy said he had held talks with banks, venture capitalists and telecoms companies, but declined to name them or to comment on how far the discussions had progressed.
ONDC aims to cover at least 100 cities and towns by August, with a target of signing up 900 million buyers and 1.2 million sellers in five years.
Bank of Baroda’s BOB.NS chief digital officer, Akhil Handa, said his bank was in talks about the project but it was too early to talk about specific use cases.
“This certainly has the potential to be the next big thing,” he said.