The rise of ONDC in India: How it shall transform the online retail landscape in India

ONDC (Open Network for Digital Commerce) is an ambitious project by the DPIIT (Department for the Promotion of Industry and Internal Trade) for democratizing E-commerce and taking it away from platform-centric models to an open network. ONDC is the government’s way to level the playing field and expand the e-commerce market for sellers and consumers. It aims to create new opportunities, curb digital monopolies and support micro, small, and medium enterprises and small traders and help them get on online platforms.

So if you are a small retailer, then ONDC will help you gain more visibility, give an easy onboarding and provide chances to expand your business. Let’s deep dive to find out how businesses can benefit from this initiative.

How ONDC will work?

Currently, online marketplaces are closed and platform-centric wherein buyers and sellers need to be on the same platform to carry out a transaction. ONDC on the other hand, does not require buyers and sellers to use the same application/platform to conduct a business transaction. Instead, it is a network-centric model (much like the UPI payment processing system) where so long as both are connected to this open network, buyers and sellers can transact irrespective of the platforms/applications they use. The aim is to enable the exchange of goods and services across various segments with discovery and engagement by any network-enabled application.

Once a retailer lists its products or services using the ONDC’s open protocol, the business can be discovered by consumers on e-commerce platforms that follow the same protocol. A consumer searching for the product can see the location of the seller and opt to buy from the neighborhood shop that can deliver faster compared to an e-commerce company.

The ONDC project aims to raise eCommerce penetration from the current 8% to 25% in the next 2 years. It also hopes to sign up 90 crore buyers and 12 lakhs sellers on the shared network within the next five years, while achieving a gross merchandise value of 3.75 lakh crore.


Source: Moneycontrol

How does ONDC aim to boost competition?

The existing platforms work in silos and are tightly controlled, keeping out many small players. The government expects ONDC to increase fair competition and foster innovation by startups. It also hopes to bring in logistics firms and others who can collaborate with sellers to deliver products to customers. The focus would be on small businesses and rural consumers, with apps in Indian languages. Users will be able to rate service providers on ONDC, which will be applicable and visible across the network.

How can you as a small business leverage ONDC?

When you list yourself as a seller on ONDC, your chances of discovery are far greater. ONDC shall not require the sellers and buyers to use the same platform/ application to be discovered by each other. So long as they use the same open network, they can be visible to each other. Thus, as a business, you can have visibility amongst buyers and connect with customers on a variety of applications/platforms. It can also enable hyper-local deliveries, directly from sellers to consumers.

With access to a larger consumer base, ONDC will make e-commerce more accessible to small retailers,new sellers, and other small businesses. It is indeed a great opportunity for businesses to enter e-commerce and/or grow their revenue.

Benefits of ONDC for small businesses:

  • Lower order acquisition cost
  • Expanded access to demand
  • Fair broadcasting
  • Easy onboarding of offered goods and services
  • Better transparency

ONDC: current status

The ONDC project is in a pilot stage where it has been tested across 15 cities like Coimbatore, Delhi NCR, Shillong, Bengaluru, Lucknow, and Bhopal. Currently, the operations are being observed, tested, and feedback is being collected.

As a part of the Beta Test, consumers across 16 pin codes in Bengaluru can now place orders in two categories – groceries and restaurants through buyer apps participating on the ONDC network. Consumers are able to shop from the buyer application of their choice. The objective of the Beta Test is to allow consumers to experience the network for the first time and gather feedback, which will help further refine the network before a pan-India roll-out. In the coming months, it will also induct other sectors such as travel and mobility.

What role will Worldline play?

ONDC is currently in an experimental phase but one can assume that the ONDC initiative will be a great opportunity for small businesses to grow.  Worldline India is gearing up to be a one-stop shop for all payment needs for small and media businesses on the platform to sell their products to a wider segment of buyers.

Until then, why wait? Start selling from your own eCommerce website today!