He was a co-founder of the software giant Infosys Ltd., became a billionaire, and then became the leader of an enormous government initiative to establish biometric identification for India’s 1.4 billion inhabitants.
Nandan Nilekani, co-founder, and CEO of Infosys Ltd. is developing a free online platform that will take into account Amazon Walmart and Amazon Walmart duopoly in India (Samyukta Lakshmi/Bloomberg)
He co-founded the software powerhouse Infosys Ltd., became a billionaire, and then was later instrumental in implementing an enormous government initiative to develop biometric identification for India’s 1.4 billion inhabitants. At 66, Nandan Nilekani has one greater goal. The prominent mogul has been aiding Prime Minister Narendra Modi to create an open-technology system that aims to equalize all the players for smaller retailers in India’s scattered but growing 1 trillion dollar retail industry.
Its stated goal is to provide an accessible online platform that allows consumers and traders to purchase and sell anything from detergent bars for 23 cents up to $1,800 tickets for flights. Its unstated goal is to eventually limit the power and influence of Amazon.com Inc. and Walmart Inc.-owned Flipkart, whose online dominance has frightened small-scale merchants and the thousands of mom-and-pop shops, referred to as Kirana, constitute the backbone of retail in America.
Since the two world-class companies put a total of $44 billion of their profits into India and seized 80percent of the market for online shopping through aggressive promotions and discounts of their preferred sellers, Kirana stores are worried about the uncertain future. Even though online commerce accounts for just 6percent of the total retail market, they’re worried to be shut out, suffering a similar fate to family-owned companies across the U.S. and elsewhere.
The non-profit system is known under the sloppy name of Open Network for Digital Commerce (or ONDC attempts to address these concerns. The first time it has been tried elsewhere It aims to let small-scale retailers and merchants join and benefit from the access and scale of the giants. In essence, the government will develop its e-commerce platform for all people, to help reduce the influence of large corporations such as Amazon that determine what brands can access the most coveted customers and under which conditions.
“It’s an idea whose time has come,” Nilekani spoke about recently in his office within his Billionaire’s Row area of Koramangala in Bangalore which is home to many of the country’s most successful tech billionaires. “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 test of the not-for-profit network, run by the government, is set to launch in the next month to users from five cities. The lenders include ICICI Bank Ltd. and the state-owned Punjab National Bank and State Bank of India have invested in stakes in the company. A spokesperson for Amazon stated that they are trying to learn more about the structure to determine whether the Seattle-based firm could play a part. Flipkart did not respond to a request for comment.
India is now a battleground for global retailers who are either from China or struggling to compete with local competitors in the country. With more than 800 million mobile users in the country, the scale and potential of the country have transformed India into a South Asian country into an ideal test ground for a variety of firms like Google, Meta Platforms Inc., and local giants like billionaire Mukesh Ambani’s Reliance Industries Ltd.
In the past, Nilekani has helped the government in the development of his government’s Aadhar biometric identification system. It’s which is essentially a digital version of that of the U.S. social security program. For the majority of Indians, this is the first proof of their existence. Authorities claim it reduces fraud and helps ensure that welfare benefits are distributed to the right recipients. Nilekani was also instrumental in introducing the backbone of the payment, known as The United Payment Interface, UPI. It is used by companies like Google and WhatsApp the UPI surpassed 5 billion transactions in June.
As an advisor to ONDC this summer the salt-and pepper-haired mustachioed tech boss is hoping to replicate for eCommerce the same thing that UPI did for digital payment.
However, his main challenge will be to ensure that the platform can achieve its goals. Amazon as well as Flipkart have taken the lead in the market due to their proven technology that draws buyers and sellers to their sites. The government must create something similar — or even better to compete with the leading e-commerce platforms said Anil Kumar who is the chief executive officer at the Redseer management consultancy Pvt.
“Everything hinges on the network bringing on the widest set of buyers, sellers, payments logistics and warehousing providers, and so on,” said 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 is also in a position to avoid the type of controversy that plagued his prior projects. Aadhar has been in the cloud of privacy, security, and identity issues. The Indian Supreme Court is currently examining an issue related to UPI after an elected official accused Amazon, Google, and Meta’s WhatsApp of engaging in the system without no enough scrutiny and possibly violating rules.
If it is successful, the electronic commerce grid could allow millions of small businesses to go online, and not have to worry about the big corporations. One of those who would like to test it is Kauser Cheruvanthody, 42. one of the founders of a chain of five stores selling baby products in Bangalore. The store has never been sold online, however, a drop of 30% in sales in the aftermath of the epidemic was a surprise.
“ONDC could change the game,” Cheruvanthody stated. “I’m ready to fight Amazon and others, discount for discount.”
Despite the obstacles, Nilekani is the right man for the job according to Hemant Taneja, the managing partner at Palo Alto-based venture capital firm 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 stated.
Entrepreneurs like Kumar Vembu are enthused by the possibilities of an open model. GoFrugal, his startup GoFrugal offers enterprise-level software for over 30,000 small-scale retailers and fast-service restaurants. He’s aiding hundreds to connect to the brand new network.
“Until now, small retailers were bringing a knife to the gunfight,” said Vembu. “Now, we can properly equip them to compete.”
The open network will target 100 cities over the coming months, according to CEO Thampy Koshy who was a former senior partner at Ernst & Young.
Aadhar required nine years to achieve one billion users on the platform, whereas UPI was able to reach four billion transactions per month. Nilekani expressed his optimism that ONDC will roll out quicker than India has gone down this path before.
“We are charting a new course and the goal is to change the rules of the e-commerce game,” the CEO said.