ONDC throwing up opportunities for everyone to innovate: T. Koshy

With ONDC, power goes back to the buyer and seller, says ONDC chief

MANY CALLED IT the ‘Amazon/Flipkart killer’ when the Narendra Modi government first unveiled the plans for the Open Network for Digital Commerce a year ago. Slowly being tested and rolled out in various parts of the country, the government’s ambitious venture to re-configure e-commerce checks boxes ranging from politics and ideology to economics and national interest.

But the proof of the pudding will be in winning over the hearts and wallets of the some 20 crore Indians who shopped online last year and the 45 crore who are expected to do so in four years. That is the unenviable task entrusted with Thampy Koshy, digital pioneer who has on his CV milestones ranging from demat settlements and Aadhaar in India to pension reforms in China. ONDC’s first CEO took time off his busy schedule to explain his blueprint to change the way India shops online. Excerpts from an interview:

Q/ ONDC is often referred to as both ‘like UPI’ and ‘the Amazon-Flipkart killer’, at least in the public’s mind.

A/ It does resemble UPI in the sense that in the same way we are trying to broaden participation. But the latter, I would say, is a wrong narrative. ONDC is not trying to compete with anybody; we are not creating a super platform in competition with the existing players. What we are trying to do is to make an inclusive agenda which will enable any platform or app to have equal opportunities in the field of commerce.

Why the talk about Amazon is that the current digital commerce all over the world works on a model where entities establish their platform using proprietary technology, providing end-to-end services from selling to buyer interface. When you create any such operation, what happens is that the entity which reaches a certain threshold the fastest in terms of usage will get the network effect of feeding on itself and will become bigger and bigger, with very limited opportunities for anybody else. It kills the competition.

Q/ We have seen that in social media.

A/ Everywhere. Whether it is in food or social media or e-commerce or mobility, hotels or travel, you see this kind of concentration happening. When this happens, the entity which has high concentration will be able to dictate terms on how the industry has to evolve. That kind of oligopoly and monopoly takes away competition and reduces options.

This is a concern all over the world, from the US and Europe to even a controlled economy like China’s. Some countries have tried to control it by regulation. Whereas in India [we are using] technology and enabling policies to address this issue. It gives an equal opportunity to everybody. Then their success and failure becomes a function of what they have to offer, not the stranglehold they have on any segment of users due to technology and investments. We have created a standard protocol which helps the industry to unbundle the building blocks of transactions like seller interface, warehouses, logistics, buyer interface, all of them.

Today all of them are one package deal. When an entity has a package deal, it ends up determining how the seller should sell, what should be the pricing and branding strategy, the commission, the discounts, everything. Whereas when you enable unbundling, the power goes back to the endpoints, to the sellers and buyers. And it also enables significant competition. While this will de-segregate the building blocks, the common ONDC protocol will ensure there is seamless commerce, because it enables everything to be stitched together.

Q/ It is not restricted to products, is it?

A/ Products and services, it could be anything. Wherever there is a product to sell and/or buy, they can prepare a catalogue using ONDC protocol, an offer can be made and a contract made for fulfilment. And the beauty is that even logistics is available as a service. You don’t have to worry about going and tying up with a delivery service provider.

Q/ Coming to the technology part, one of the allegations against the Big 2 was that they favoured in-house sellers through the algorithm. How does ONDC platform keep it neutral?

A/ In your mind, you are thinking like a platform. ONDC is not a platform. Secondly, [what you mentioned] was possible because the seller and buyer were captive users. When a buyer puts in his requirements through his buying app, say through a bank or telco or any platform, the buying agent’s interest will be to help the buyer make the right decision. The platform’s interest is with the buyer, he does not even know who the seller is. This will naturally reduce the propensity of any seller to do things behind the back of the buyer.

Q/ Many expected ONDC to roll out quickly. Somehow the pace seems to be a bit slow.

A/ Abracadabra happens only in fairytales. Look at any transformation project―UPI, UIDAI, all of them took time. Nothing happens overnight. But this will certainly be faster than all of them. It will take a few months for everything to come together. We started in five cities, now we are in 80 cities, only for limited users. In Bengaluru, we have opened up to the public. Next year this time you will see a significant shift. Any national transformation project takes two or three years to reach its full potential.

Q/ Would you say ONDC gives a fillip to local, small-time businesses?

A/ There is an enormous possibility for local producers to make their products visible. And that is where we are making extra efforts to help the local businesses.

Q/ Will there be regional languages and audio support?

A/ All of them. Each of the buyer applications will add regional language support and improvising. We are actively encouraging people to work on it. The beauty of ONDC is that it is throwing up enormous opportunities for everyone to innovate. In the current market, you don’t have that option. If you want to set up [an alternative] e-commerce operation in India, it is going to be hugely expensive. Only one or two people can manage it. But here, in six months, if a friend of yours wants to try out his new app, he gets the opportunity.