DIGITAL DISRUPTOR: Decoding ONDC’s modus operandi
Platform offers small businesses access to a wider customer base.
By Uma Ganesh
Open Network for Digital Commerce (ONDC) launched last year is picking up momentum. With just 30 transactions a day last year to 600 transactions now, and 26,000 merchants offering more than 27 lakh products on its network, ONDC is disrupting digital commerce. Despite increased access to digital technology, penetration of digital commerce stands at just 5% which ONDC views as a huge opportunity to capitalise upon. The aim of ONDC is to create a standardised digital commerce infrastructure that benefits the entire e-commerce ecosystem, including sellers, marketplaces, logistics providers, payment gateways, and consumers. With its implementation gaining wider adoption, it is expected to unlock new opportunities for businesses in various sectors.
As internet connectivity expands to rural and tier III/IV towns, e-commerce platforms can offer a wide range of products and services to previously underserved consumers. As per Redseer Report, the number of online buyers from tier II and smaller cities — which account for more than 80% of the population — will triple in five years. It will go up from about 78 million in 2021 to nearly 256 million by 2026. Hence the ONDC initiative is seen as a boon for small retailers who would be servicing customers from small towns in particular.
India being a diverse country with distinct regional preferences and demands, e-commerce allows businesses to cater to specific niche markets and reach customers across different regions, offering personalised products and services. Envisioned to make e-commerce more inclusive and accessible for consumers, ONDC logistics partners can deliver products to 90%-plus PIN codes across India and has plans to make the coverage 100% soon.
While all sizes and categories of businesses can be on ONDC platform, small businesses could benefit the most. They would be able to expand their reach and tap into new customer segments they may not have been able to do on their own. Even when their products match up to the quality and cost expectations of customers, due to algorithmic bias, they may not feature amongst the top 10 and hence with the current e-commerce platforms, they may not be able to find a large number of customers.
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ONDC aims to provide a common set of APIs and protocols that facilitate seamless integration between various stakeholders in the e-commerce ecosystem. For small companies, this standardised infrastructure can help reduce the costs and complexities associated with integrating their systems with different e-commerce platforms and services. Their operations would also get benefitted by aligning their processes with those as defined by the platform. Thus, small businesses should be able to function without any technical constraints and offer reliable and seamless experience to their customers which can be as good as any large player. They would therefore be able to concentrate on the quality of their offerings rather than be concerned about the medium for access to their customers.
The writer is chairperson, Global Talent Track, a corporate training solutions company