ONDC’s beta launch in September this year has generated a lot of interest in the business community. The launch of a network using open specifications and open network protocols independent of any specific platform brings the promise of democratising e-commerce by levelling the playing field for big and small enterprises and fostering business competition. 

ONDC’s rollout is expected to dismantle the walled gardens in the e-commerce industry by empowering merchants to onboard through one app but inter-operate on multiple e-commerce marketplaces. It will also enable merchants to plug-and-play various other services like payments, delivery, online presence, billing, and marketing through a single platform, providing both merchants and customers with considerable flexibility. 

If ONDC lives up to its promise, it could transform the entire e-commerce landscape in India just like UPI has done for digital payments. Its ambitious goals include the onboarding of 900 million buyers, and 1.2 million sellers, and achieving a gross merchandise value of USD 48 billion, in the next five years alone. 

Charting a new path 

In some ways, India is the ideal playground for the launch of ONDC. With more than 7.9 million micro, small and medium enterprises in the country, a large population, and a fairly developed e-commerce market, it presents a unique opportunity to experiment with an open digital commerce network that enables all businesses to compete with one another irrespective of revenue or market size.   

With internet penetration at 692 million and growing—the number is expected to touch 900 million by 2025 driven by strong rural growth—it is likely for ONDC to become a nationwide phenomenon that goes much beyond urban centres to reach the Indian hinterland. An expected growth in smartphone users to 1 billion by 2026 could speed up ONDC adoption, paving the way for shaping consumer behaviour marked by the predominance of online commerce. 

Onboarding and other factors 

Despite many enabling factors, there are certain challenges for ONDC including the onboarding process. With millions of merchants expected to sign up on the network, an important area of focus could be the simplification of the process so that merchants can easily self-register. Secondly, the value proposition of ONDC needs to be communicated extensively to merchants so that they are clear about its benefits—something that is already underway. 

ONDC has already been launched in markets like Bengaluru and it should gain traction in the next few months. Several companies have tied up with ONDC by integrating it in their apps and platforms. 

In our own interactions with merchants and businesses, we have observed a great deal of interest in ONDC. In fact, no merchant we have approached has refused to join it till date! All they need is a clear articulation of the benefits of the platform and what they can get from it. ONDC puts them in a win-win situation that augurs extremely well for their business. The encouraging response we have received from merchants has led us to believe that it is only a matter of time before ONDC takes off in the country.  

Future trajectory 

As ONDC is adopted by more and more people, there are three prominent trends that could play out. One, there could be an increasing number of innovations that will be built using ONDC as the base solution. Two, we could witness growing interest from venture capitalists in apps and platforms built on the ONDC network, accompanied by the infusion of funds. 

And finally, we could see a growing number of large brands and businesses join the ONDC bandwagon, where the early adopters will be at a clear advantage. Going ahead, businesses will need to factor in ONDC in their marketing plans and create a separate strategy for it. 

From unbundling of services to seamless one-time cataloguing, ONDC provides all the instruments to usher in a high degree of flexibility in e-commerce unmatched in the world till date. Robust onboarding agreements, data security, and even a dispute resolution mechanism to build user trust are some of the features that will play a crucial role in its spread and popularisation enabling it to potentially transform digital commerce worldwide.