Amazon to join ONDC with logistics, SmartCommerce offerings

Amazon India will be joining Open Network For Digital Commerce (ONDC), the central government’s flagship programme, by integrating its logistics network (from pickup to delivery) and SmartCommerce offerings, the company said on Friday. 

SmartCommerce is an AWS-powered suite of SaaS products that enables MSMEs in India to build and scale their business across digital mediums and will have enablers for onboarding to the ONDC network. This will be Amazon’s initial collaboration with ONDC as we continue to explore other potential opportunities for stronger integration between the two in the future.

The company says the move will provide greater technology support to the seller community and further empower small businesses, and will also provide wider choices for consumers across the country. At present, Amazon has over 11 lakh sellers, ranging from small businesses and kirana stores, with more than 50% located in tier 2 cities and below. The company plans to digitise as many as 1 crore businesses by 2025.

"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. We are excited about the opportunities to mobilise Amazon’s industry-leading infrastructure and technology, including logistics, and small business digitization tools, to help the ONDC accelerate its objectives. We remain committed to being a catalyst for India’s digitization efforts throughout the economy,” says Manish Tiwary, country manager, India Consumer Business, Amazon India.

What is ONDC?

ONDC was launched in line with the government's start-up India initiative on December 30, 2021, to curb the presence of digital monopolies in the domestic ecommerce market. ONDC aims to promote open networks for all aspects of the exchange of goods and services over digital or electronic networks, and caters to larger numbers of traders, categories of goods, geographies and companies.

By onboarding small retailers, the government is trying to create an alternative to e-commerce giants such as Amazon, Jio and Flipkart. 

"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 democratise digital commerce in India, and we also hope that the buyer and seller platforms are onboarded as early as possible," says T Koshy, managing director, and chief executive officer of ONDC. 

With ONDC, sellers can sell their goods in any part of the country without having to worry about paying hefty commissions to ecommerce platforms, they can opt for a logistics service provider that suits them the best and most importantly they don’t need to spend a fortune on acquiring customers.

State-run public sector lenders Punjab National Bank and State Bank of India own 9.5% and 7.84% stakes in ONDC, respectively. ONDC had its alpha rollout in April last year across five cities to test live transactions with a closed group of sellers and buyers and marked its footprint in 83 cities across India. As part of the beta testing phase, the network went live to public users in Bengaluru in grocery and F&B categories with buyer apps like Mystore, PayTM, and Spicemoney, 12 Seller applications (GoFrugal, Growth Falcon, eSamudaay, Digiit, Ushop, Sellerapp, Bizom, uEngage, Innobits, eVitalRx, Mystore, nStore) and two logistics providers (Loadshare, Dunzo).