Paytm Mall is reportedly creating a long-term sustainable business in association with ONDC
The development comes at a time when 24 ecommerce startups including Flipkart’s Ekart Logistics, Dunzo, and PhonePe have been selected for ONDC’s pilot phase
By pivoting the business, Paytm E-commerce’s early investors–Alibaba and Ant Group have exited the company
Paytm E-commerce, the parent company of Paytm Mall has shared plans to pivot to Open Network for Digital Commerce (ONDC) platform to explore export business opportunities.
Through this, Paytm Mall is reportedly creating a long-term sustainable business in association with ONDC that aims to democratise the purchase and sale of goods in the Indian market, driving transparency and digital independence for small businesses in the country.
The development comes at a time when 24 ecommerce startups including Flipkart’s logistics arm Ekart Logistics, hyperlocal delivery startup Dunzo, and payment service provider PhonePe have been selected for ONDC’s pilot phase.
By pivoting the business, Paytm E-commerce’s early investors–Alibaba and Ant Group have exited the company.
Paytm’s parent company One 97 Communications Limited (OCL) has no direct or indirect shareholding in Paytm E-commerce. The company is also not a part of the OCL group although it uses the Paytm brand and receives services from OCL.
On April 29 this year, ONDC started its pilot project by launching its platform in five cities of India including Delhi NCR, Bengaluru, Bhopal, Shillong and Coimbatore. It is presently focusing more on retailers and restaurants.
Under the ONDC project, real-time transactions in the retail and food delivery space have also started in some cities such as Shillong and Delhi.
Before the official rollout of the project, the government is trying to make processes more robust. It is likely to take six months for the entire exercise to stabilise.
While trader catalogues are being made in Bhopal and Coimbatore, the two dozen startups are also at various stages of integration which may take at least two to three months.
“With this pilot phase, we want to learn as to how this rolls out in the real life environment where you actually make payments, do the deliveries, cancel orders and how refunds work. Once these lessons are known, we would create a playbook, which will be a set of standards,” Anil Agrawal, additional secretary in the Department For Promotion of Industry and Internal Trade (DPIIT), said at the time of the soft launch.
ONDC is a brainchild of Piyush Goyal-led Department for Promotion of Industry and Internal Trade (DPIIT). Formed on December 31, 2021, ONDC has been incorporated as a private sector-led non-profit company.
It is backed by some of the major banks such as State Bank of India (SBI), Axis Bank, HDFC and Kotak Mahindra. In March this year, State Bank of India (SBI) picked up a 7.84% stake in ONDC for INR 10 Cr. Previously, Kotak Mahindra, HDFC and Axis Bank also picked up a stake in the ONDC for an amount of INR 10 Cr each.
With this project, the government aims to democratise digital commerce, moving it from a platform-centric model to an open network. In the growing ecommerce market of India, the dominance of deep-pocketed players such as Amazon and Flipkart has been questioned innumerable times over multiple platforms.
The move comes at a time when India has emerged as the world’s fourth-largest retail market in the world, pegged at around $810 Bn, as per a report by Bain & Company. On the other hand, the addressable ecommerce market in the country is expected to reach the $200 Bn mark by 2026, an Inc42 report estimates.
