Billionaire Techie Battles Amazon, Walmart in India

Apr 28, 2022 | Billionaire News

Nandan Nilekani

To establish a biometric identity for India’s over 1.4 billion people, he co-founded software behemoth Infosys Ltd. which became a fortune.

Nandan Nilekani, at 66, has another objective. The billionaire is assisting Prime Minister Narendra Modi in creating an open technology network to enable small businesses to compete in the country’s $1 trillion retail industry.

To develop a free internet marketplace where traders and consumers can trade everything from 23-cent detergent bars to $1,800 plane tickets. But its hidden goal is to weaken Inc. and Walmart Inc.-owned Flipkart, whose online dominance has worried small businesses and the millions of Kirana stores that make up the nation’s retail backbone.

The Kirana shops face an uncertain future as the two global giants pumped $24 billion into India and controlled 80% of the online retail sector with aggressive discounts and promotion of favored vendors. Despite only making up about 6% of the total retail market, they fear being wiped out, like many family-owned businesses in the US and abroad.

The non-profit Open Network for Digital Commerce (ONDC) tries to address those problems. It aims to connect small merchants and retailers to giants’ reach and economies of scale. By creating its e-commerce platform for everyone, the government hopes to reduce the grip of companies like Amazon that decide which brands reach prime consumers and on what terms.

It’s a concept that’s finally arrived, Nandan Nilekani remarked recently in his private office in Bangalore’s Billionaire’s Row, home to some of the country’s top IT tycoons. “We owe it to the millions of small vendors to make internet commerce accessible to them.”

The non-profit, government-run network will be tested next month in five locations. ICICI Bank Ltd., Punjab National Bank and State Bank of India have all bought holdings. Amazon said it is studying the model to determine whether it can play a role. No comment from Flipkart.

Some global retail behemoths who are either kept out of China or struggling to compete with local rivals have turned to India. The country’s size and potential have made it a popular testing ground for firms like Google, Meta Platforms Inc., and local titans like Mukesh Ambani’s Reliance Industries Ltd.

In prior incarnations, Nilekani aided the government in developing the Aadhar biometric ID system, a computerized social security program. It is most Indians’ first proof of existence. Aides d’urgence believe it helps eliminate fraud and ensures benefits get to the correct Nilekani also helped establish the United Payment Interface (UPI). It reached 5 billion transactions last month, thanks to Google and WhatsApp.

The salt-and-pepper IT czar, hired by ONDC last summer, wants to accomplish for e-commerce what UPI did for digital payments.

His main task would be to secure the network’s success. Amazon and Flipkart have dominated the market because of their proven technology. Anil Kumar, CEO of Redseer Management Consulting Pvt, says the government must construct something equivalent — or better — to compete.

Everything depends on the network bringing in as many buyers, merchants, payment logistics, and warehouse providers as possible. “The aim is to establish an open network where everyone gains by standardizing and smoothing the experience for consumers and sellers.

Also, Nandan Nilekani must avoid the scandals that have beset his prior enterprises. Concerns over data privacy, security, and identification have dogged Aadhar. A senator accused Amazon, Google, and Meta’s WhatsApp of engaging in the system without much oversight and allegedly in violation of rules.

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