India’s duopoly breaker looks to shake up SEA ecommerce

Collin Furtado co-reported this story.

Imagine browsing an item that’s listed on Shopee, and then ordering the same product that’s also displayed on Lazada – all in one place.

It sounds unreal, but India is creating an ecommerce network just like this called the Open Network for Digital Commerce (ONDC). Such a system would challenge deep-rooted ecommerce giants like Amazon and Flipkart in the country.

In current ecommerce ecosystems, “you end up having only one or two players, because it’s the only way you can buy and sell to a large number of people,” ONDC chief business officer Shireesh Joshi tells Tech in Asia. This gives monopoly powers to one or two players, with less or no incentives left for a third or fourth platform, he adds.

Southeast Asia, for instance, is controlled by Shopee, Alibaba-owned Lazada, and new entrant TikTok Shop, while India has the duopoly of Amazon and Walmart-owned Flipkart.

See also: Southeast Asia’s ecommerce players go low to get ahead in price war

This dynamic not only restricts consumer choices and hinders the growth of smaller businesses, but it also leads to price manipulation by the dominant players.

The question is this: Does ONDC have the ability to truly create an open network for ecommerce that levels the playing field?

And to follow that up, can this model be replicated in international markets like Southeast Asia?

Looking to sail into SEA

Incorporated in December 2021, ONDC is an Indian government initiative that allows buyers to connect to ecommerce sellers on any app as long as the platform is integrated to the network.

Think of it as the internet of ecommerce, where users can connect with each other regardless of the browser, device, or operating system.

Major players like Snapdeal, Meesho, Ola, Paytm, Tata Neu, Coca-Cola, and Nestle have already joined ONDC.

Since its launch, the ecommerce organization has sparked interest from countries like Singapore, Indonesia, and Malaysia, says Joshi.

A delivery dilemma

Commission complications

Real change or only for optics?

Only time will tell