Google Will Be Engaged In India's Largest E-commerce Network, ONDC

Google cooperates with e-commerce network in India, ONDC. (photo: doc. pixabay)

JAKARTA - Alphabet Inc's Google is in talks with the Indian government to integrate its shopping services with the open e-commerce network, ONDC.

As reported by Reuters, India was launching the Open Network for Digital Commerce (ONDC) late last month as the government tried to end the dominance of US companies Amazon.com and Walmart in the country's fast-growing e-commerce market.

The Indian government estimates India's e-commerce market to be worth more than US$55 billion (Rp 805.7 trillion) in gross merchandise value by 2021 and will grow to US$ 350 billion (Rp 5127.6 trillion) by the end of the decade.

ONDC's chief executive, T. Koshy, told Reuters that Google was one of many companies in discussions to be associated with the project.

The Google talks follow in the footsteps of its successful payments business due to the government's initiative for financial transactions, the Unified Payments Interface (UPI), said one of the sources, who was not identified.

Google's existing shopping business only functions as an online list aggregator and doesn't perform order fulfillment such as shipping, as Amazon does.

A Google spokesman declined to comment on whether they were in talks with the Indian government.

"We remain committed to focusing on empowering small and medium-sized businesses to leverage digital for deeper discovery and payment capabilities with Google Pay," the spokesperson said, referring to its payments service.

The ONDC project partners, which currently include Indian fintech firm Paytm, will list each other on their platforms in search results. The government's goal is to level the playing field by reducing the cost of doing business for any seller who wants to list their products online.

Some industry executives, however, have raised concerns about how listings from different sellers will be prioritized.

"The logic is that the highest seller/best value seller will probably be shown first, which means it won't be a level playing field," said Mahesh Narayanan, former head of Google's mobile ad business in India.

The ONDC program aims to join 30 million sellers and 10 million online merchants, and cover at least 100 cities and towns by August. This is a very large market share in the world.

Caesar Sengupta, chief executive of financial technology startup Arbo Works which played a key role in founding Google Pay in India, said he saw great potential with ONDC.

"One thing that ONDC definitely needs is a consumer player to drive adoption with the masses," he said. "You may remember that UPI had only 17 million transactions per month before Google Pay launched and the graph after is a hockey stick."