In a bid to break Amazon Inc (NASDAQ:AMZN) and Walmart Inc's (NYSE:WMT) duopoly in the country's e-commerce sector, India is lining up banks and other key players to set up its own "buyer platforms."
What Happened: According to Reuters sources, the country's administration is in discussion with some of its biggest banks for setting up "buyer platforms." This will allow customers to place orders for buying goods and services from the Open Network for Digital Commerce (ONDC), which the government soft-launched in April.
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The platform promises equal access to all online sellers and buyers regardless of their size and is a priority for India's Prime Minister Narendra Modi, who aims to make India self-reliant with the help of small businesses.
This comes at a time when India's competition watchdog is probing Amazon and Walmart-owned Flipkart for allegedly promoting preferred sellers. The authorities have also conducted raids on the offices of Amazon and Flipkart's sellers.
ONDC Chief Executive T. Koshy said, "If you look at the seller side, anybody who can make their digital catalog visible using this common language will have access to a large pool of buyers shared across apps [on ONDC]."
"It is no longer controlled by one large corporation," he added, signaling a competition for Amazon and Walmart.
The e-commerce giants Amazon and Flipkart control more than 60% of that market in India and now account for about 8% of total consumer purchases in a country of 1.35 billion people.
Sources familiar with the matter told Reuters that State Bank of India, Axis Bank, ICICI Bank (NYSE:IBN), and HDFC Bank (NYSE:HDB) are among other lenders in discussions with ONDC to set up buyer platforms.
Price Action: According to data from Benzinga Pro, Amazon shares closed 1.23% higher at $2,433 apiece, while Walmart shares shed 2.47% to close at $125.45 apiece.
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