 "PhonePe CTO and co-founder Rahul Chari and PhonePe Founder and CEO Sameer Nigam")
Fintech major PhonePe on Tuesday forayed into e-commerce with the launch of a shopping app, Pincode, on the government-backed Open Network for Digital Commerce (ONDC) platform. The app will focus on hyperlocal commerce.
The move is expected to help Walmart-owned PhonePe take on players such as Flipkart, Amazon, Reliance’s JioMart and Tata-owned BigBasket in the e-commerce space which is forecasted to grow to $350 billion by 2030. Pincode is currently live only for customers in Bengaluru and will launch in other cities very soon.
The Pincode app will promote local shopkeepers and sellers. It aims to digitally connect each city’s consumers with all their neighbourhood stores that they usually buy from offline. PhonePe said this would be done with the convenience of online ordering, discounts and instant refunds and returns.
“We will list all sellers democratically,” said Sameer Nigam, chief executive officer and founder PhonePe, after unveiling the Pincode app at the company event here in the presence of Nandan Nilekani, Infosys co-founder and former chairman of the Unique Identification Authority of India (UIDAI), and ONDC CEO T Koshy.
“We will make sure that there's a lot of data that is made available right back to the stores. So we're not here to decide who the winner is. We actually want way more choice,” said Nigam.
Nigam is expecting Pincode to witness 1 lakh transactions per day in the next few months. Since the launch Pincode has already onboarded over 500 sellers for groceries, 3000 for food and 200 for pharmacy. The app will help bring out the inherent strength of neighbourhood stores.
PhonePe said it would offer consumers a better and wider selection of products than the competition and will include both well-known national brands, as well as locally manufactured groceries, apparel, footwear, accessories etc. This will not only provide a stimulus to the local retailers, but also to the entire local ecosystem powering commerce including the MSME’s (micro, small and medium enterprises) and farmers.
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Pincode will invest significant effort in digitally enabling every Indian shopkeeper spread across every nook and corner, over the next few years.
“Pincode offers a new approach to e-commerce, which puts all the local stores and sellers at the heart of digital shopping,” said Nigam. “Pincode which is built on the ONDC network, allows us to generate demand for merchants digitized by various seller platforms in an inclusive manner. It is creating new opportunities for growth and driving innovation at scale.”
PhonePe believes that ONDC can foster the rapid growth of a new hyperlocal e-commerce business model. Apart from local buyers and sellers, PhonePe said such a model will also benefit other ecosystem participants like the last mile logistics and inventory management players.
At the event, Nandan Nilekani, a member of ONDC’s advisory council said that ONDC platform will democratise e-commerce for millions of small retailers in India.
“Sameer (Nigam), Rahul (Chari, PhonePe co-founder) do things with amazing alacrity and scale. I think this will be the start of a new era in e-commerce,” said Nilekani about the launch of the Pincode app by PhonePe.
When ONDC was conceived in December 2021, the idea was to reduce the dominance of e-commerce giants like Amazon and Flipkart. It was also to bring in a level-playing field for small merchants in India’s fragmented but fast-growing $1-trillion retail market.
“ONDC is the next big thing,” said Nilekani. “It is going to democratise e-commerce in India and (make sure) it is not limited to only a few players, but every supplier in the country,” said Nandan Nilekani.
Nilekani said these businesses could include a small grocery store, electronics retailer or a restaurant owner -- bringing millions of such enterprises onto the e-commerce marketplace on an open basis and buyers will come from any consumer app.
He said that India has achieved financial inclusion in about seven-eight years with homegrown technologies like Aadhaar, UPI, QR code and more. The next step is to connect millions of small retailers to mainstream e-commerce with ONDC to create a robust digital public infrastructure.
PhonePe founded in December 2015, has 450 million registered users. One in four Indians is now on PhonePe. The company has also successfully digitized over 35 million offline merchants spread across Tier 2,3,4 and beyond, covering 99 per cent pin codes in the country.
When asked why the Pincode app was launched separately despite PhonePe having a huge number of users, Nigam said that PhonePe’s expertise is in making payments in the shortest amount of time, while shopping is experiential and customers need to spend some time on it. He said if PhonePe had opened e-commerce on its platform there would have been a deluge of orders and it couldn’t have handled that.
Rahul Chari, who is also the chief technology officer at PhonePe said the information architecture needed for multi-category shopping is different and the company had to launch a separate app.
