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Wednesday, November 13, 2024

ONDC sellers uneasy as Pai Platforms broadens reach through Bitsila deal

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The acquisition of the ecommerce platform Bitsila by Pai Platforms, formerly known as Paytm E-commerce, has raised concerns among participants in the seller network of the government-backed Open Network for Digital Commerce (ONDC).

According to some participants, Pai Platforms is already among the largest buyer apps on ONDC, and the acquisition of Bitsila will expand its presence significantly on the seller apps side as well. However, both ONDC and sources within Pai Platforms stated that there is no justification for these concerns.

While seller apps enroll merchants, buyer apps are customer-facing platforms where customers can place orders.

Girish Pai, CEO of the seller app GrowthFalcons, remarked that if a buyer app transitions into a seller app, it will indeed raise significant concerns. However, he emphasized the need to intensify seller engagement and carve out a distinctive niche in response.

Continue Exploring: Govt-backed ONDC sees rapid adoption, CEO T. Koshy expects tenfold merchant growth in coming year

Sameer Sharma, chief executive of UEngage, which helps restaurants save aggregator commission, said, “With Paytm’s acquisition of Bitsila, it might say merchants will have more benefits if onboarded to ONDC via the Bitsila seller app. That may be their strategy. As of now, Magicpin is present both on the buyer side and the seller side. After this acquisition, even Paytm will be present both on the buyer side and the seller side, and this is problematic.”

Queries directed at Pai Platforms and Magicpin went unanswered.

Sources within Pai Platforms revealed that one of the primary challenges currently faced by ONDC is the expansion of its supplier base. As the third-largest seller app on ONDC, Pai Platforms is actively engaged in efforts to enhance this aspect of the network, with the goal of delivering benefits throughout the platform, according to the sources.

They mentioned a notable scarcity of suppliers, a situation that ONDC is eager to rectify. Additionally, they noted that many sellers commonly found on popular platforms such as Swiggy, Zomato, or Amazon have not yet joined ONDC.

Incorporating more significant players with extensive reach is seen as a beneficial move, sources said. Pai is focused on diversifying its array of offerings, including top restaurants similar to those on Swiggy and Zomato, to attract more users, they said.

Girish Pai cautioned that if buyer apps also enter as seller apps, there will likely be duplication of sellers or, specifically in the food and beverage sector, duplication of restaurants.

However, sources at Pai Platforms said, “If Pai is able to onboard a restaurant at a lower commission compared to other seller apps, it is not duplication; Pai is adding value to the network at a lower price.”

T. Koshy, the chief executive of ONDC, stated that worries regarding the network becoming monolithic on both the buyer and seller sides due to the presence of the same players operating on both sides were unfounded.

Continue Exploring: In a first, fair price shops join ONDC platform for digital transformation

People are increasingly getting influenced by what he called “a platform strategy”. “Platforms which have end-to-end control are successful. It is not possible for one entity to have expertise in everything,” he said.

“A major percentage of sales of established platforms come from a handful of sellers. The rest are long tail businesses that are costly for them. While some players may become large in the network, it is not possible for a few large players alone to corner all the business on ONDC,” Koshy said.

“In ecommerce, it is not just technological capabilities but operational capabilities too that matter. Regional players may have better operational efficiency compared to big players. They may be able to draw on SaaS solutions offered by large engineering companies. Magicpin alone cannot establish itself as the only service provider. There are other players like UEngage and Growth Falcon, too, who have established themselves because of their product offerings,” he said.

“One acquisition cannot corner every part of the market. One entity cannot acquire every seller, of every product, of every domain,” Koshy explained.

Continue Exploring: ONDC network live in 500 towns & cities, MoS Commerce affirms full adherence to e-commerce regulations

SnackTeam
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SnackTeam is a specialised group of editorial staff motivated to improve the lives of individuals and society. The team intends to bring the most authentic, well-researched and dependable content for you and your loved ones every day.
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