An assault on the economics of digital platforms will possibly rank among the most far-reaching separations of platforms and commerce seen anywhere.
The investing world is enthralled by a determined Beijing as it cuts China’s private sector down to size by relentless regulatory action. That’s good news for New Delhi: Its more subtle maneuvers in the same direction are going largely unnoticed.
Amazon.com Inc. and Walmart Inc.’s Flipkart, however, would surely have felt the rising temperatures. Even as they weigh draft e-commerce rules that seek to restrict online marketplaces--not just theirs, but also the planned super-app by India’s Tata Group--a new existential threat lurks around the corner: a state-sponsored open network for digital commerce.
Commerce Minister Piyush Goyal has set up a committee, chaired by him, to “democratize digital commerce” and “provide alternatives to proprietary e-commerce sites,” according to a ministry press release.
In China, homegrown stores like Taobao, Tmall and JD.com have an unshakable dominance in online retail. But now, the only other billion-people-plus opportunity open to American capital is also slipping away from its grasp.
It’s unclear how exactly India’s open e-commerce network will work--or if it will work at all. The template, according to the press statement, is the country’s highly successful Unified Payments Interface, a public utility that allows any entity to process real-time payments over smartphones provided a set of common protocols is followed. The UPI network has in a short time eclipsed proprietary card-based payments.
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