Amazon, on February 24, announced that it will integrate its logistics network and SmartCommerce services with the Open Network for Digital Commerce (ONDC), India's effort to unbundle and democratise e-commerce. While this sounds like—and has been reported in media as—a significant win for ONDC (especially given that ONDC aims to break the dominance of Amazon), it is not really, for two main reasons: 1. Amazon's e-commerce arm (the shopping platform) is not joining ONDC: Currently, Amazon and Flipkart dominate India's e-commerce space. As a consumer, these are probably the first two platforms you check for something because they have a vast base of products and sellers. And sellers flock to these platforms because buyers are there. In other words, Amazon and Flipkart enjoy tremendously from network effects. ONDC, on the other hand, lacks this at the moment. The network is currently focused on grocery delivery and, to a lesser extent, direct-to-consumer brands. It is not yet a go-to platform for anything and everything. Onboarding Amazon and Flipkart would be a game-changer for ONDC because the two platforms will bring their enormous seller base with them. Consumers will then have a strong incentive to shop on ONDC because they will get the products that Amazon and Flipkart have in addition to products from other sellers. But, unfortunately, Amazon has not committed to bringing its e-commerce platform to ONDC. Without that, ONDC will always be lacking, unless it manages to create better network effects than the US giant, which is a Herculean task. 2. ONDC suffers…
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Amazon announced that it will integrate its logistics network and SmartCommerce services with the Open Network for Digital Commerce (ONDC).
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