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Road to India@100: A new era in e-commerce

Road to India@100: A new era in e-commerce

The arrival of ONDC has disrupted India's e-commerce space. It will play a pivotal role in empowering millions of customers and merchants

T. Koshy, Managing Director and CEO of ONDC T. Koshy, Managing Director and CEO of ONDC

The arrival of India’s ‘techade’ with a focus on ‘Jai Anusandhan’ has brought forth a new paradigm of opportunities and possibilities through a focus on innovation. It is an era infused with technological prowess, as seen across the world with the coming of the fourth industrial revolution. The vision for India’s techade, however, is unique with an underlying value of empowerment. It’s a vision which harnesses a relationship between emerging technologies and those at the margins who have missed out on leveraging the power of these tools. It’s our non-digitally enabled small farmers, entrepreneurs, micro, small and medium enterprises, cottage industries, traders, artisans, weavers, etc., spread across the length and breadth of this country, who are being empowered.

Technology isn’t being looked at as a tool for simply bolstering economic productivity but for augmenting the productive capabilities of every stratum of society. It is no surprise that India ranks first in digital payments, first in data consumption, second in internet users and third in the number of unicorns. A technological structure is being constructed for the welfare of all. In this spirit, focussing on empowering the marginalised, India is undergoing a revolution in the e-commerce sector with the coming of the Open Network for Digital Commerce (ONDC).

E-commerce has been a boon to our age of connectivity, enabling geography-agnostic commerce. However, as e-commerce platforms grew, so did their market power. This power was misused with customer lock-ins, predatory pricing, malpractices such as algorithms used for forcing consumers to choose certain suppliers and high commissions which were discriminatory to the smaller players. The Indian e-commerce sector, valued at $46.2 billion in 2020, is poised to touch the $188-billion mark by 2025. However only 15,000 of 120 million retailers are accessing this e-commerce revolution.

In this context, ONDC was conceived by the Ministry of Commerce, under the leadership of Minister Piyush Goyal and guided by an eminent advisory council. It was conceived to bring forth a sustainable technological paradigm wherein e-commerce can experience systematic and sustainable growth across the value chain. It exists to deliver a vision to enable access to Indian consumers for every merchant regardless of size, location and business offering, promoting choice and empowerment of consumers and committing to those at the margins by on-boarding MSME entrepreneurs on to the network. This is being done by bringing together innovative protocols enabling interoperability across e-commerce platforms on the buyer, seller or logistics end.

ONDC’s governance module is transparent and stakeholder-community led. The focus has been to ensure superlative privacy and security protection for each entity on the network. It also promises to have a state-of-the-art online dispute resolution process such that the experience on the network is qualitatively seamless and hassle-free.

ONDC is enabling decentralised value assimilation and integration such that specialised goods and services offerings can create transactional engagements with each other for the benefit of the entire ecosystem. For instance, a merchant who is a producer of specialised goods can benefit from e-commerce without worrying about marketing and logistics services. It is removing switching costs for consumers between platforms, ensuring the enhancement of the online experience, and leading to the end of the era of gatekeepers in e-commerce.

ONDC’s alpha pilot to a closed user group launched in April 2022 and has now extended to 80-plus cities. It launched beta testing in Bengaluru, in end-September, with 22 network participants, 12 seller-applications, seven buyer applications and three logistics applications. And 300-plus further entities are under various stages of integration as seller/buyer/logistics app, which includes large entities like HUL and IDFC bank, and start-ups like Meesho and Ninjacart. Entities like the Ministry of MSME and SIDBI are helping create market access through ONDC for their constituents, including micro enterprises and retailers. NABARD and SFAC are working on a programme to bring the agriculture sector to ONDC, such that farmer producer organisations (FPOs) are able to leverage this invaluable technology to assist farmers find the right prices for their produce. The One District One Product (ODOP) programme is already live on the ONDC network, and ONDC has initiated outreach programmes to commence integration efforts for other similar initiatives across India.

The beta test is open to the public in urban Bengaluru in grocery and food & beverages. It provides a valuable opportunity to review and solve any operational or technical challenge, bolster the confidence of on-boarded and incoming network participants and showcase the technological marvel that ONDC proposes. In the coming months, ONDC will be adding other domains such as fashion, BPC, home decor, electronics, etc., providing equal opportunities to big and small organisations to usher in a new era in e-commerce formulated and implemented in India.

These trends are naturally intensifying with ONDC structured as an opportunity plank for entrepreneurs and start-ups to think anew and reach the hinterland of the nation. As a result, it is not hard to foresee that going forward, instead of having a few companies dominate the market sphere, there will be a Cambrian explosion of start-ups leveraging the network, thereby benefitting the entire e-commerce sector.

India’s techade is focussed on technological innovations and empowering the marginalised with its open, inclusive, interoperable, transparent and trust-based design principles. We are at a pivotal moment in our developmental trajectory. As technology shapes ideas, individuals and institutions, there is an opportunity to design a technological architecture for India and for the world, with an active push for a fair and just society.

ONDC is playing its part in this techade by unleashing economic freedom for every unique merchant and consumer. It is building a new model for the world in e-commerce, empowering every individual and entity with an opportunity to realise their potential in the Indian economy and beyond. 


The writer is Managing Director and CEO of ONDC

Published on: Feb 05, 2023, 9:59 AM IST
Posted by: Arnav Das Sharma, Feb 05, 2023, 9:56 AM IST