Blue chip firms such as State Bank of India (SBI), Punjab National Bank (PNB), and leading bourses — BSE and NSE — are keen to promote an indigenously-developed and not-for-profit online network to check the dominance of e-commerce giants such as Amazon and Flipkart, officials aware of the plan have said.
Senior executives of several companies indicated their willingness to put in equity in the proposed private entity that will execute the Open Network for Digital Commerce (ONDC) at a meeting chaired by commerce and industry minister Piyush Goyal on Monday, they said requesting anonymity.
The government has set up a nine-member advisory council, including Nandan Nilekani, chairman of Infosys, and National Health Authority CEO R S Sharma, to help with the conceptualisation of ONDC. The aim, according to the officials is to make e-commerce platform-agnostic.
Other firms interested in participating in ONDC are Bank of Baroda, National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI), National Payments Corporation of India (NPCI), National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL), the officials cited in the first instance added.
“It has been decided that combined equity stakes of all state-run companies in the proposed corporate entity shall remain below 51% to give it a status of a privately-run not-for-profit company,” one of the officials present in the meeting said.
The official said it is “a work in progress” and “we aggressively plan to set up the company by the end of this calendar year”. “However, no existing market-participants [both domestic and foreign e-commerce platforms] will be allowed to pick up any stake in the proposed company to ensure neutrality,” he added.
A commerce ministry statement issued on Tuesday confirmed the development. “A non-profit company structure removes any incentive for owners to drive for profit maximisation, keep the focus on ethical and responsible behaviour while providing for trust, rigorous norms of governance, accountability and transparency,” it said. ONDC is an initiative of the department for the promotion of industry and internal trade (DPIIT), an arm of the ministry.
A second official mentioned above said the network will work for e-commerce in the same manner as Unified Payments Interface (UPI) does in the digital payment space. “As UPI broke the duopoly of MasterCard and Visa to allow indigenously developed payment options such as RuPay and BHIM, ONDC aims to unshackle the e-commerce space from dominant platforms and allow seamless access to all stakeholders, including wide choices to customers from one network without visiting different platforms,” the official said.
Explaining the objective of the project in the Lok Sabha on August 4, minister of state for commerce Som Prakesh said ONDC would make e-commerce more inclusive and accessible for consumers as they can access any seller or product through any compatible application or platform. “It will enable the consumers to match demand with the nearest available supply. This will also give consumers the liberty to choose their preferred local businesses,” he said.
ONDC aims to standardise operations, promote inclusion of local suppliers, drive efficiencies in logistics and lead to enhancement of value for consumers, he added.
According to the Confederation of All India Traders (CAIT), ONDC will give varied options to consumers purchasing goods or services online “thus enabling healthy competition in the e-commerce market which is presently under hostage of few big e-tailers”.
“A huge market will be available without much effort to e-tailers whereas consumers will also be able to buy the goods of their choice from the seller of any company associated with this platform. At present, a customer who is connected to only one portal can buy goods from that only. To buy from any other portal, he has to go to another portal, whereas on this network he is completely free to buy goods or services from any firm without logging to any other e-commerce portal,” said CAIT secretary general Praveen Khandelwal, who is also a member of the ONDC advisory council.
At the review meeting on Monday, experts told Goyal that an ONDC gateway has been established and experts from the Quality Council of India are executing the project in a mission mode. The meeting was also attended by DPIIT secretary Anurag Jain.
Source : Hindustan Times
