(Adds comments from former Google executives)
NEW DELHI, May 27 (Reuters) - Alphabet Inc's
Google is in talks with the Indian government to integrate its
shopping services with the country's open e-commerce network
ONDC, two sources familiar with the matter told Reuters.
India soft-launched its Open Network for Digital Commerce
(ONDC) late last month as the government tries to end the
dominance of U.S. companies Amazon.com and Walmart
in the fast-growing e-commerce market.
The government estimates https://www.investindia.gov.in/sector/retail-e-commerce/e-commerce
the Indian e-commerce market was worth more than $55 billion in
gross merchandise value in 2021 and will grow to $350 billion by
the end of this decade.
ONDC Chief Executive T. Koshy told Reuters that Google was
one of many companies it was in discussions with to be
associated with the project.
Google's talks follow the success of its payments business
because of the government's initiative for financial
transactions, the Unified Payments Interface (UPI), said one of
the sources, both of whom declined to be identified as they were
not authorized to discuss the matter with the media.
Google's existing shopping business works solely as an
aggregator of listings online and doesn't carry out any order
fulfillment like delivery, which the likes of Amazon do.
A Google spokesperson declined to comment on whether it was
in talks with the government.
"We remain committed to focus on the enablement of small and
medium businesses to leverage digital for deeper discovery and
payments capabilities with Google Pay," the spokesperson said,
referring to its payments service.
Partners of the ONDC project, which currently includes the
likes of Indian fintech firm Paytm, will show listings
from each other on their platforms in search results. The
government's aim is to level the playing field by reducing the
cost of doing business for any seller who wants to list their
Some industry executives, however, have raised concerns over
how listings from different sellers will be prioritized.
"The logic would be that the highest sellers/best rated
sellers will probably get displayed first, which means it will
not be a level-playing field," said Mahesh Narayanan, a former
head of Google's mobile ads business in India.
The ONDC program aims to join 30 million sellers and 10
million merchants online, and cover at least 100 cities and
towns by August.
Caesar Sengupta, the chief executive of financial technology
startup Arbo Works who played a critical role in establishing
Google Pay in India, said he sees big potential with ONDC.
"One thing ONDC will definitely need is a consumer player to
drive adoption with the masses," he said. "You may remember that
UPI had only 17 million transactions per month before Google Pay
launched and the graph thereafter is a hockey stick."
(Reporting by Munsif Vengattil and Krishna N. Das in New Delhi
and Paresh Dave in Oakland, California; Editing by Shri
Navaratnam and Kim Coghill)