GoI’s e-commerce network for small players is a good idea. The customer interface will be essential

The GoI’s quest to create an open digital e-commerce network for small businesses holds great promise. The proposed model has the potential to be a game-changer for small retailers and new tech startups facing big e-commerce giants and their market dominance and commissions. It can also address sellers’ limitations of being tied to a single platform and the supposedly opaque algorithms they use to prioritize certain sellers. Brick-and-mortar retail still accounts for well over 90% of retail sales, but mom-and-pop stores that drive a large share of consumer goods sales (75-80%) are feeling the heat from e-commerce players aggressively targeting new customers. segments like groceries, promising 10 -minute deliveries.

After its technological successes of the Aadhaar system and the UPI digital payment solution, GoI can rightly claim a good track record. Another promising digital venture is the National Digital Health Mission which aims to digitize the health records of all citizens. And it’s good that the presence of e-commerce giants Amazon and Walmart-owned Flipkart didn’t intimidate the GoI. There is economic logic in safeguarding livelihoods in the unorganized retail sector and boosting MSMEs, as long as this is not done by introducing distortion or discrimination. The involvement of Nandan Nilekani, who played a key role in the conceptualization of Aadhaar and UPI, for the Open Network for Digital Commerce (ONDC), also added weight to the project.

But unlike digital payments and the pioneering UPI, e-commerce has dominant players with user-friendly websites and apps, excellent customer service, and fast delivery networks. ONDC-based offers must be equally good to attract sellers and customers. And the smart, non-disruptive solution will be to allow existing e-commerce players to operate as-is, with their proprietary technologies for supplier onboarding, inventory, price discovery, and delivery logistics. ONDC, with its premise of greater cross-platform visibility and the ability to discover sellers, should not be imposed on anyone. If the interoperable networks and applications built on ONDC facilitate tasks such as cataloging, inventory management, order fulfillment and delivery logistics, buyers and sellers would be automatically attracted. ONDC can also help tomorrow’s e-commerce/tech startups save redundant investments in the e-commerce network and focus on customer acquisition. Next month’s ONDC pilot project will be followed closely.

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