What an Open Digital Infrastructure for E-commerce Could Look Like

Let’s start simple.

Before we talk about digital commerce platforms, let’s start simple – about how we think of roads, railways and public utilities. Well, we consider them public goods, built by the government for citizens. We should look at large public digital platforms in the same way. It means an entire innovation eco-system created by the government to help digital innovation thrive!

By all measures, the time is ripe - with 80 crore Indians accessing the Internet, the lowest cost of data and the highest per capita consumption of data in the world, India is ready for digital innovation that is focused on enabling growth. 

This is especially necessary for the MSMEs who are a key part of India’s growth story, and stand poised to take the leap towards digital transformation. What this open network can do is to make e-commerce processes open source, thus creating a platform that can be utilised by all online players equally.

What is a public digital platform?

Let’s take the example of United Payments Interface, that we are all familiar with as UPI. From a few hundred thousand transactions when it started to an explosive growth of over 4.2 bn transactions in a month, it is a brilliant example of a digital public platform that puts the customer needs first. It uses open-source technology for larger social benefit. Despite the initial doubts that people had, its revolutionary adoption happened when consumers were presented with innovation that came with choice, price parity and fairness. It’s no secret that several unicorn success stories relied on UPI as a key pillar in their success. Other examples of this are the Aadhaar stack and the National Digital Health Mission. 

An example of the digital commerce network in action

With this basic understanding let’s look at digital commerce, especially when it comes to MSMEs who can harness its power. The government is seeking to build a UPI-style digital infrastructure for e-commerce. It is envisioned to be an open technology framework that will allow people to build apps that have common standards for everybody - not just the big established players. It aims to democratize the e-commerce industry with the use of technology.

Here is an example of how this open network might work: imagine a pickle maker who supplies delicious homemade pickle to local wholesalers, each of whom have a different billing software. How can the seller show how much stock they have to fulfil orders at any given time to all wholesalers? Now if all of them use the same open digital protocol, then small manufacturers can post what they have to all buyers who can immediately order the pickles. Now all of this can happen without the intervention of private players – via an open protocol that will bring a level digital playing field to all. This network will aid MSMEs in their digital transformation by developing readymade tools to help existing software applications quickly adapt to the network. Small businesses can access the tools and resources needed to make the most of this. 

What this means for MSMEs

I expect this to turn e-commerce from its current form into an open digital infrastructure, which is highly scalable for sellers and customers to connect with each other, without the barrier of switching between marketplaces for a particular product. This moves the business from a platform-centric approach to an open-source framework. It will digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers. This comes from a need for a more level playing field, an open innovation ecosystem, through a network that is open. It is a fair playground where more entrepreneurs can join the game, participate, innovate and create value.


Author

Author

Arvind Gupta

Head and Co-Founder | Digital India Foundation

Featured Member

He has over 27 years of industry experience, having worked in diverse sectors in a variety of leadership, policy and entrepreneurial profiles in India and Silicon Valley, USA. He has considerable experience in Consumer Internet, Digital Media, Payment Systems, Analytics and Data Economy.

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