ONDC Will Spur A Revival In Ecommerce Innovation
Traditional ecommerce is ruled by the winner take all approach. ONDC goes against this, by unbundling the essential aspects of commerce and making it interoperable
Photo Credit : Ritesh Sharma,
Ecommerce giants have done wonders to spread awareness and kickstart the e-retail movement in India but e-retail as a portion of retail is still in the single digits. This is despite the huge catalogue assortment, standardisation, fulfilment infrastructure, instant returns and refunds.
The growth of ecommerce in India is a paradox. Despite experiencing meteoric growth in recent years, India's ecommerce sector still has much-untapped potential with e-retail penetration at 5-7 per cent.
India's approach to unbundle payments made the world look up and take notice. Now it's time to disrupt commerce with the Open Network for Digital Commerce or ONDC.
"Some (conservative) estimates indicate that the ONDC Network could add 60-80 billion USD to India’s economy by 2030," Vibhor Jain, COO & President, Network Governance, ONDC suggests.
With the dust settling over some of our initial successes, 2023 is of immense significance for ONDC. Today, selling on digital commerce is still considered to be attainable by the few, meant for those who are part of an exclusive club. 2023 is when the first signs of a truly democratised digital commerce landscape will start taking shape. Buyers and Sellers, alike, will start witnessing that transacting digitally will become the norm, leveraging the plethora of benefits that e-commerce offers such as greater choice, greater discoverability, and convenience and strongly complemented by the obvious business sense of buying and selling online. In terms of enabling pillars, we are already well endowed with rapidly proliferating internet and digital access, increased adoption of UPI, low data prices, and a digital financial footprint. ONDC will spark the crucial element required for enabling digital commerce at a national scale - behaviour change, primarily unlocked by innovation in the space.
"In 2023, I foresee the first wave of innovation emerging out of ONDC, especially in technology and business. This will be possible because of unbundling and interoperability, which will bring down barriers to entry on both the technology and business front," T Koshy, ONDC claims.
There are thousands of accounts like this from early historians that have mmarvelledat India’s bazaars and commerce and how it brings together craftsmen, artisans, merchants, and everyday folk.
Centuries later, with the help of technology, we might be able to bring the Grand Indian Bazaar back to life. Only this time, the bazaar spans the whole of India and instead of a few hundred or thousands, there will be millions of merchants selling everything from groceries to furniture.
The way to make this a reality is through a unique confluence of technology, policy, and entrepreneurship called the Online Network for Digital Commerce, or simply, ONDC. Over the course of this extensive report we will dive deep into everything ONDC and share perspectives from entrepreneurs building on it and insights on how it will change commerce. But if you have only a few minutes, here are four key takeaways
- ONDC is a common language of commerce: ONDC is not a platform killer or even an e-commerce website, it is set of protocols that enables various players across a commerce transaction across the country to talk to each other and fulfill a transaction.
- Traditional e-commerce is ruled by the winner take all approach. ONDC goes against this, by unbundling the essential aspects of commerce and making it interoperable, it is making the pie big enough for everyone to share.
- Eretail has been reduced to a game of fine margins, the ONDC model could revitalize innovation in the space. Unbundling will enable niche players to build specialized apps and open data will shed new light on buyer behavior and sellers to borrow better.
- Expect initial bumps and bold bets: As we explain later in the report, there will be some challenges for ONDC to gain hold, like, the cold-start problem, ensuring a seamless customer experience. However, while these are inevitable, the entrepreneurs and investors who chose to venture into this will need to be brave and reframe how to understand and value outcomes.
Their push unlocked a huge market by distributing production and personalizing consumption and it moved from “What is seen, sells” to “What can get delivered, sells”.
(With inputs from Susmit Patodia, Capital Director, Antler India and co-authored by Nitin Sharma (Partner, Antler) and Gokul Kumaravelu)
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