Amazon to integrate logistics network, SaaS products with ONDC

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E-commerce major Amazon announced on February 24 that it will integrate its logistics network and suite of SaaS products with the Open Network for Digital Commerce (ONDC), an interoperable e-commerce protocol backed by the Indian government.

“This will be Amazon’s initial collaboration with ONDC as we continue to explore other potential opportunities for stronger integration between the two in future,” the company said in a statement.

The open network seeks to increase e-commerce penetration in the country to 25 percent in the next two years, reaching 900 million buyers and 1.2 million sellers through the network, while hitting the $48-billion mark in terms of the gross merchandise value.

Dynamic pricing, inventory management and optimisation of delivery cost are the three important pillars that ONDC is banking on to reduce the cost of doing business for everybody, including retailers.

In April 2022, the network piloted a soft launch in five cities – Bengaluru, Delhi NCR, Shillong, Bhopal and Coimbatore. Since then, ONDC has also started a beta pilot in Bengaluru and other tier-2 cities.

Manish Tiwary, Country Manager, India Consumer Business at Amazon India, said, “Amazon’s vision and commitment for India are 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 digitisation tools, to help the ONDC accelerate its objectives. We remain committed to being a catalyst for India’s digitisation efforts throughout the economy,” he added.

Other e-commerce and fintech players which have committed to joining ONDC are Meesho, Snapdeal, Shiprocket, Paytm and PhonePe.

Moneycontrol reported earlier that top FMCG players like ITC, Dabur and Nivea and banks like Kotak Mahindra and IDFC First are in various stages of integrating with the network.

Built on the guardrails of software designed by the Beckn Foundation, a non-profit backed by Infosys chairman Nandan Nilekani, ONDC wants to replicate the success of the United Payments Interface (UPI) in digital payments for digital commerce in India.