PhonePe, India’s largest mobile payments app, is now targeting e-commerce, following its early success on the government-backed UPI network seven years ago.
On Tuesday, Walmart-backed Bengaluru company Pincode unveiled a hyperlocal shopping app powered by the Open Network for Digital Commerce (ONDC), an Indian government effort to democratize e-commerce via a zero-commission platform.
At a Tuesday press conference, PhonePe officials claimed Pincode would cooperate with local merchants and launch in Bengaluru. However, the General Atlantic and Tiger Global-backed businesses want to progressively grow to other cities and reach 100,000 orders daily by year’s end.
Pincode now concentrates on areas such as grocery, medications, food, gadgets, and home décor.
ONDC, a non-profit corporation founded by India’s commerce ministry in 2021, is an “interoperable” network where buyers and sellers may conduct business independently of service, challenging customers’ dependency on Amazon and Flipkart.
PhonePe co-founder and CEO Sameer Nigam called this the UPI moment for e-commerce. “E-commerce has good friction. Would we have joined e-commerce without ONDC? No way.”
Executives from scores of companies, including 48-year-old shop Sangeetha Mobiles and eateries, hope ONDC disrupts the market and drives incumbents to drop their prices.
Walmart-backed PhonePe expands e-commerce.
Pincode is a new shopping tool that places local retailers and sellers at the center of digital purchasing growth. He continued, “Pincode is built on the ONDC network, which allows us to build demand for merchants digitized by multiple seller platforms in an inclusive manner while providing new development prospects and pushing innovation at scale.”
PhonePe, worth $12 billion, joining ONDC is amazing in many aspects.
- Walmart-backed app ONDC is chasing a significant player. Amazon, Google, and Facebook have neglected the network.
- PhonePe has sought new income streams while controlling over 50% of UPI network value.
- PhonePe will cross-sell insurance and other services using its vast platform.
Last year, Flipkart’s 2016 acquisition PhonePe left. However, PhonePe claimed it would “invest major effort” in Pincode and “enabling every Indian merchant spread throughout every nook and corner, over the next several years,” even if Flipkart doesn’t plan to enter into mobile payments.
By 2025, investment manager Sanford C. Bernstein expects India’s e-commerce business, driven by Flipkart and Amazon, will be worth $133 billion. Morgan Stanley says ONDC will disrupt e-commerce, but it needs some work.
“We see execution issues… such as bridging the trust deficit between sellers and buyers, and providing real-time availability data for inventory management,” they stated in recent research.