India's effort to break Amazon Inc and Walmart Inc's 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, Reuters reported.
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.
According to Mint, ONDC is a non-profit company whose network will enable the display of products and services from all participating e-commerce platforms in search results across all apps on the network.
For example, if both Amazon and Walmart's Flipkart integrate their platforms with ONDC, a user searching for a Bluetooth headset on Amazon would also see results from Flipkart on the Amazon app.
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.
"If you look at the seller side, anybody who can make their digital catalogue 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 telecom companies, but declined to name them or to comment on how far the discussions had progressed.
According to government estimates, 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.
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.
Other lenders in discussions with ONDC to set up buyer platforms include ICICI Bank, HDFC Bank, Kotak Mahindra, and IDFC First Bank, according to three sources familiar with the matter. They spoke on condition of anonymity because they were not authorised to speak to the media.
One of the sources said that venture capital firms Accel and Sequoia are also in talks about potentially investing in start-ups that would join ONDC.
Last week, Reuters reported that Google was also in talks with Indian governments to integrate its shopping services with ONDC.