Google Said to Be in Talks With India to Integrate Shopping Services With E-Commerce Network ONDC

Two sources familiar with the matter told Reuters that Alphabet Google is in talks with the Indian government to integrate its shopping services with the country’s open e-commerce network ONDC.

India soft launched its Open Network Digital Commerce (ONDC) late last month as the government attempts to end the dominance of US companies and Walmart in the fast-growing e-commerce market.

The government estimates that the Indian e-commerce market was worth more than $55 billion (approx. Rs.4,27,031 crore) in total merchandise value in 2021 and will grow to $350 billion (approx. Rs.27,17,470 crore) by the end of this decade.

Koshy, chief executive of ONDC, told Reuters that Google was one of several companies in discussions to link it to the project.

Google’s talks come on the heels of the success of its payments business due to the government’s financial transaction initiative, one of the sources said, both of whom declined to be identified because they were not authorized to discuss the matter with the media.

Google’s current shopping business only acts as an aggregator of online listings and does not carry out any orders such as delivery, which is what the likes of Amazon do.

A Google spokesperson declined to comment on whether it was in talks with the government.

“We remain committed to focusing on enabling small and medium businesses to leverage digital technologies to explore deeper payment capabilities with Google Pay,” the spokesperson said, referring to its payments service.

ONDC’s project partners, which currently includes the likes of Indian fintech company Paytm, will display lists from each other on their platforms in search results. The government aims to level the playing field by reducing the cost of doing business for any seller who wants to list their products online.

However, some industry executives have raised concerns about how to prioritize listings from different vendors.

“The logic is that the top sellers/best sellers will likely be shown first, which means it won’t be a level playing field,” said Mahesh Narayanan, former head of Google’s mobile advertising business in India.

The ONDC program aims to join 30 million sellers and 10 million online merchants, and covers at least 100 cities and towns by August.

Caesar Sengupta, CEO of fintech startup Arbo Works who played a significant role in founding Google Pay in India, said he sees great potential with ONDC.

“The only thing ONDC will definitely need is a consumer player to drive adoption with the masses,” he said. “You might remember that UPI only had 17 million transactions per month before Google Pay launched and the graph after that is a hockey stick.”

© Thomson Reuters 2022

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