Amazon Teams Up With Indian Corporation ONDC

Amazon has joined the Indian government-backed Open Network for Digital Commerce (ONDC) initiative to challenge the dominance of companies like itself and Walmart’s Flipkart in the Indian e-commerce market.

The move comes after the e-commerce giant agreed to integrate its logistics network and SmartCommerce platform into the ONDC, which was set up by India’s commerce ministry in 2021.

ONDC is an “interoperable” network, which allows buyers and sellers to conduct business regardless of the app or services they use.

With this initiative, the Indian government is seeking to replicate the success it has had with UPI, the interoperable mobile payments network, which disrupted the walled-garden mobile wallets from firms such as Paytm and MobiKwik.

Manish Tiwary, country manager for Amazon India, said,

“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.”

However, Amazon’s participation in the initiative is remarkable, as ONDC has been seeking to disrupt the monopoly of Amazon and Flipkart in the Indian e-commerce market.

The model has many challenges to address, with industry executives unsure who would be responsible if a customer doesn’t receive their order. Unlike UPI, ONDC has not yet received much public praise and support from the Indian government.

Despite the challenges, T Koshy, MD and CEO of ONDC, welcomed Amazon’s participation and said,

“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 democratize digital commerce in India.”

The ONDC network aims to democratize online shopping in the South Asian market and provide a level playing field for small businesses to compete with e-commerce giants like Amazon and Flipkart.