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EXCLUSIVE: ONDC to give public access by August; first round of fundraising nearly complete

EXCLUSIVE: ONDC to give public access by August; first round of fundraising nearly complete

A UPI-type protocol, ONDC will enable discovery and shopping of products and services from partnering entities across the member applications on its network.

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Open Network for Digital Commerce (ONDC), the private non-profit company established by the Department for Promotion of Industry and Internal Trade of the Government of India to level the e-commerce playing field, aims to open up the network for public access by August. The section 8 company has extended the pilot to Lucknow, the sixth city after Delhi NCR, Bengaluru, Bhopal, Shillong, Coimbatore.

“We will allow a larger set of people to come and experience it (ONDC) in pin codes where we have certain threshold. As and when we see there are enough sellers in a pin code area, we will open it up to the public. Opening up in gradual fashion will start in August,” T Koshy, CEO, ONDC, told Business Today.

A UPI-type protocol, ONDC will enable discovery and shopping of products and services from partnering entities across the member applications on its network. The solution aims to break the duopoly of Amazon and Walmart-backed Flipkart on the ecommerce market in India, and provide a level-playing field for digital sellers in the country.

As of now, seven entities are live and another 10 are in advance stages of integration including three on buyer side, four sellers and three logistic providers. Koshy said another 15 of them are in early stages of integration process. Over 150 entities have signed up on the network to integrate their apps.

On the logistic side, Bengaluru-based Loadshare is already live on the network while a host of logistic service providers including Flipkart's in-house supply chain arm eKart, hyperlocal delivery Dunzo, Ecom Express and Shiprocket are under integration now. On the buyer side, Paytm has joined the network already while a large private bank is expected to go live in a month’s time. CSC e-Governance Services India Limited, a Special Purpose Vehicle (CSC SPV) incorporated by the Ministry of Electronics and Information Technology (MeitY) to deliver government’s e-services to rural and remote locations, is expected to go live both on buyer and seller side in two weeks. Retail software firm GoFrugal, local commerce platform eSamudaay, digital marketing company Growth Falcon, and analytics firm Sellerapp are among the seller apps that have joined ONDC’s seller network.

“By August-September, we will start having a seed presence in at least about 75-100 towns and that will form the foundation on which the network with grow in an organic fashion. At that point, we will open up for the public at large in select cities. By next year, we expect to see a hockey stick-like growth taking shape. If CSC SPV comes live, by end of the year, we will see some sort of a presence in at least half of the villages in India. CSC has a network of over four lakh Village Level Entrepreneurs (VLEs),” Koshy said.

He said the company has received over 80 per cent of the capitalisation commitment sought for the first round.

“Government said it (ONDC) needs to have the flexibility and agility of a private company. We created a budget of Rs 150-200 crore for first couple of years. We saw great interest from institutions to support this because it is a foundation on which a lot of opportunities will shape up. ONDC selected 20 institutions and asked them to put Rs 10 crore each. 17 of them have completed their committed contribution by March 31, 2022, remaining three will complete it by next month,” he said.

The institutions backing the ONDC include top five public sector banks, BSE, NSE, National Securities Depository Ltd (NSDL), Central Depository Services India Ltd (CDSL), National Payments Corporation of India (NPCI), NABARD, SEBI, and CSC-SPV.

He said the company will assess the requirement for future funding next year and may begin charging nominal fees in the future.

“Next year, we will make an estimation on the kind of new innovation we want to build on top of it. if we need more money, we will go back and may allow some more market participants, but none of them individually or collectively will have more than 50 per cent ownership. It’s a private company with a public purpose, a common utility company. We don’t have to give anyone dividends, we don’t have to worry about valuations, we just want to make sure that there is sufficient money to run the company. We will have some very marginal charges,” Koshy said.

Food, electronic goods, garments and accessories, home décor, and mobility are some of the verticals the pilot is being conducted. ONDC has held discussions with National Restaurant Association of India (NRAI) for deeper collaboration and their various chapters have agreed to bring their members on to the platform. NRAI has long been campaigning against the duopoly of food delivery marketplaces Zomato and Swiggy.