Billionaire tech pioneer Nandan Nilekani takes on Amazon, Walmart in India

He co-founded software program powerhouse Infosys Ltd., grew to become a billionaire and went on to spearhead a colossal authorities program to create biometric identification for India’s nearly 1.4 billion folks.

Now 66, Nandan Nilekani has yet one more bold objective. The high-profile mogul helps Prime Minister Narendra Modi construct an open expertise community that seeks to stage the taking part in subject for small retailers within the nation’s fragmented however fast-growing $1 trillion retail market.

Its acknowledged function is to create a freely accessible on-line system the place merchants and customers should purchase and promote all the pieces from 23-cent detergent bars to $1,800 airline tickets. But its unstated goal is to ultimately curb the powers of Amazon.com Inc. and Walmart Inc.-owned Flipkart, whose on-line domination has alarmed small retailers and the tens of millions of native mom-and-pop shops, known as kirana, that type the nation’s retail spine.

As the 2 world giants poured a mixed $24 billion into India and captured 80% of the net retail market with aggressive reductions and promotion of most popular sellers, the kirana outlets are petrified of an unsure future. Despite on-line commerce accounting for nearly 6% of the general retail market, they’re anxious they are going to be ultimately snuffed out, assembly a destiny much like many family-owned companies within the U.S. and elsewhere.

The not-for-profit system, which fits by the unwieldy title of Open Network for Digital Commerce, or ONDC, seeks to deal with these issues. Never tried anyplace else, it goals to permit small retailers and retailers to plug in and acquire the attain and economies of scale of giants. Essentially, the federal government would create its personal e-commerce ecosystem for everybody, designed to loosen the stranglehold of corporations like Amazon that dictate which manufacturers get entry to prime customers and on what phrases.

“It’s an idea whose time has come,” Nilekani mentioned just lately in a dialog at his non-public workplace within the Billionaire’s Row space of Koramangala in Bangalore, house to a number of the nation’s high tech tycoons. “We owe it to the millions of small sellers to show an easy way to participate in the new high-growth area of digital commerce.”

A pilot of the not-for-profit, government-run community is ready to be rolled out subsequent month to pick out customers in 5 cities. Lenders together with ICICI Bank Ltd. and state-owned Punjab National Bank and State Bank of India have purchased stakes within the entity. A spokesman for Amazon mentioned they’re making an attempt to raised perceive the mannequin to see if the Seattle-based firm has a task to play. Flipkart didn’t reply to a request searching for remark.

India has turn out to be a battlefield for some world retail behemoths which might be both shut out of China or are struggling to compete with native rivals there. With nearly 800 million smartphone customers, the sheer dimension and potential have turned the South Asian nation into a super testing floor for a lot of corporations, together with Google, Meta Platforms Inc. and homegrown giants corresponding to billionaire Mukesh Ambani’s Reliance Industries Ltd.

In his earlier avatars, Nilekani helped the federal government develop the Aadhar biometric ID system, roughly a digital equal of the U.S. social safety program. For most Indians, it’s their first proof of existence. Authorities say it helps cut back fraud and ensures welfare funds attain the proper folks. Nilekani additionally helped introduce a funds spine known as the United Payment Interface, or UPI. Used by the likes of Google and WhatsApp, it surpassed 5 billion transactions final month.

Hired as an adviser to ONDC final summer time, the salt-and-pepper haired, mustachioed tech czar desires to do for e-commerce what UPI did for digital funds.

But his largest problem could be to make sure the community achieves its targets. Amazon and Flipkart have dominated the market as a result of their examined expertise lures retailers and patrons to their platforms. The authorities must construct one thing comparable — or higher — if it desires to outdo the dominant e-commerce platforms, mentioned Anil Kumar, chief government officer of Redseer Management Consulting Pvt.

“Everything hinges on the network bringing on the widest set of buyers, sellers, payments logistics and warehousing providers, and so on,” mentioned Bangalore-based Kumar. “The challenge is to standardize and smoothen the experience such as returns and refunds for buyers and sellers and to create an open network where everybody wins.”

Nilekani may even be below strain to keep away from the form of controversies which have dogged his earlier initiatives. Aadhar has been below a cloud over information privateness, safety and identity-related issues. India’s Supreme Court is at the moment inspecting a matter linked to UPI, after a lawmaker accused Amazon, Google and Meta’s WhatsApp of collaborating within the system with out a lot scrutiny and allegedly in violation of guidelines.

If profitable, the e-commerce grid may assist tens of millions of small companies log on and fear much less in regards to the world giants. Among these wanting to attempt it out is Kauser Cheruvanthody, 42, one of many homeowners of a five-store baby-products chain in Bangalore. He’s by no means bought on-line however a 30% decline in gross sales in the course of the pandemic got here as a shock.

“ONDC could change the game,” Cheruvanthody mentioned. “I’m ready to fight Amazon and others, discount for discount.”

Despite the challenges, Nilekani is the proper man for the duty, mentioned Hemant Taneja, managing companion at Palo Alto-based enterprise capital agency General Catalyst.

“Nandan is known for his long game, for setting up systems for enduring change with very intentional thinking on which parts of the economy should be digital public goods and which parts capitalism-driven,” Taneja mentioned.

Entrepreneurs corresponding to Kumar Vembu are enthused by the prospects of an open mannequin. His startup GoFrugal supplies enterprise software program to over 30,000 small merchants and quick-service eating places. He’s now serving to a whole lot of them combine with the brand new community.

“Until now, small retailers were bringing a knife to the gunfight,” mentioned Vembu. “Now, we can properly equip them to compete.”

The open community is focusing on 100 cities within the coming months mentioned CEO Thampy Koshy, a former senior companion of Ernst & Young.

Aadhar took 9 years to achieve a billion folks on the platform, whereas UPI took 5 years to cross 4 billion month-to-month transactions. Nilekani mentioned he’s optimistic that ONDC can be rolled out a lot quicker as India has been down this street earlier than.

“We are charting a new course and the goal is to change the rules of the e-commerce game,” he mentioned.