ONDC Way Forward - Part 1

ONDC pilots have been rolled out. First for a select list of buyers by invitation across a few cities which now covers 85 cities. Subsequently last month the network has been opened to the public in urban Bangalore as part of beta testing. We have demonstrated in the last few weeks that the idea works and a few thousand real transactions across different products have successfully been concluded. Now let us take a look at the road ahead.

Open Network for Digital Commerce is a globally pioneering idea to democratise digital commerce. The idea is to enable any seller who makes its catalogue visible in the network using ONDC protocol directly or through a seller aggregator to be visible to any buyer accessing the network through any ONDC-compliant buyer app. So eventually eCommerce as it exists now as a domain with a few large players will become irrelevant. This means that digital commerce becomes another powerful channel for the product/brand manager and the rules of the game in this channel will be determined by endpoints (the seller and the buyer) as in the case of all other channels that are used by the product owners/ brand managers for promoting their products and not decided by behemoth intermediaries.

This is not “abracadabra” with all sellers and buyers adopting some magic solution and everybody “living happily ever after”, it’s a long journey. The first challenge is to get a threshold level of transactions in the network to create a natural pull for all the buyers and sellers. This is a classic “Chicken and Egg” Story. Unless there are buyers enabled by buyer applications there is no incentive for the sellers to be on the network and unless sufficient merchants are offering diverse products, there is no incentive for buyers to be on the network and buyer platforms to put resources behind the idea. Realising this challenge, ONDC has taken a two-pronged approach. First is to work with digitally mature entities to bring them on board at the earliest to prime the network and second are to support digitally handicapped entities to take advantage of this network. The former is to ensure that the network is attractive to a broader cross-section of buyers so that the sellers coming on board have commercial benefits from this network.

As a part of priming the network, we are actively engaging with entities who already have digital consumers in their lines of business-like banks, telcos and fintech to bring their consumers onto the network by launching applications, thereby creating a pool of buyers and digitally mature sellers to bring their products to be discoverable on the network. What is really exciting is that the idea is so powerful that it has already attracted several entities to be early adopters. They include entities like #PayTM , #IDFC First Bank and a few innovative players like #MyStore , #Spicemoney , and #Craftsvilla launched their buyer apps already and many more like #CSC , #PhonePe , and #Axis Bank in an advanced stage of onboarding. On the seller side, around 12 entities are already live and another 400 entities are in pipeline. They include established players like #HUL , #Nivea ,#ITC , #YESBank and #GlobalLinker and a number of innovative start-ups like #Digiit , #eSamudaay , #Gofrugal , #GrowthFalcons , #Sellerapp , #Ushop and many more. On the logistics side #Loadshare , #Dunzo and #Shiprocket are already live with #eKart , #Grab and #IndiaPost close on their heels. (List of entities signed for being Participants is available at www.ondc.org)

The main objective of establishing the Open Network is to help digitally handicapped entities to benefit from digital commerce with enhanced market access. Keeping this in view, in parallel with the effort of priming the network ONDC will have special initiatives to enable and empower the merchants from the MSME sector. Towards this, we are developing and implementing initiatives with agencies like central and state MSME ministries, NABARD, SIDBI, Ministry of Agriculture, Industry associations etc towards developing digital literacy, standard software solutions, and guidance around best practices and much more.

Most of the current Network Participants who are early adopters have started with vanilla features of their applications. But many have already put in product and engineering teams to unleash innovative options for buyers and merchants in the next few months. As mentioned above all these initiatives will pick up momentum not in days, but definitely in the next few months. I don’t want to steal anybody’s thunder and leave it to them to make their announcements.

From the side of ONDC, we have brought some of the best experts to join ONDC in helping the players from various segments of the industry to innovate and exploit this new freedom to win on innovation and specialisation and not just based on scale. ?We believe this handholding will help to break the current platform-centric models and unleash innovation across the industry completely transforming commerce and supply chain as we know it now.