Nilekani to take on e-commerce giants with open tech network

BENGALURU: He co-founded software powerhouse Infosys Ltd., became a billionaire and went on to spearhead a colossal government program to create biometric identification for India’s almost 1.4 billion people.

Now 66, Nandan Nilekani has one more ambitious goal. The high-profile mogul is helping Prime Minister Narendra Modi build an open technology network that seeks to level the playing field for small merchants in the country’s fragmented but fast-growing $1 trillion retail market.

Its stated purpose is to create a freely accessible online system where traders and consumers can buy and sell everything from 23-cent detergent bars to $1,800 airline tickets. But its unspoken objective is to eventually curb the powers of Amazon.com Inc. and Walmart Inc.-owned Flipkart, whose online domination has alarmed small merchants and the millions of local momand-pop stores, called kirana, that form the nation’s retail backbone. As the two global giants poured a combined $24 billion into India and captured 80% of the online retail market with aggressive discounts and promotion of preferred sellers, the kirana shops are fearful of an uncertain future. Despite online commerce accounting for just about 6% of the overall retail market, they are anxious they will be eventually snuffed out, meeting a fate similar to many family-owned businesses in the US and elsewhere.

The not-for-profit system, which goes by the unwieldy name of Open Network for Digital Commerce, or ONDC, seeks to address those concerns. Never attempted anywhere else, it aims to allow small merchants and retailers to plug in and gain the reach and economies of scale of giants. Essentially, the government would create its own e-commerce ecosystem for everyone, designed to loosen the stranglehold of companies like Amazon that dictate which brands get access to prime consumers and on what terms.

“It’s an idea whose time has come,” Nilekani said recently in a conversation at his private office in the Billionaire’s Row area of Koramangala in Bangalore, home to some of the nation’s top tech tycoons. “We owe it to millions of small sellers to show an easy way to participate in the new high-growth area of digital commerce.”