ONDC’s impact

Ensure that all businesses, regardless of their size, location, or digital proficiency, can easily participate in digital commerce.

Enable local retail ecosystems to access and fulfill online demand.

Enhance business efficiencies in India by reducing various cost overheads such as acquisition costs, digital presence costs, and inventory costs across all businesses.

Formalise businesses by creating active digital history and enable easier access to finance options.

Economic development and livelihood creation opportunities across the digital commerce value chain including, logistics, packaging, last-mile delivery, and other areas.

Enable easy participation in digital commerce coverage to all businesses irrespective of size, location, digital quotient, and other areas.

Expand the digital commerce landscape in India by amplifying geographic and socio-economic coverage.

Enable increased trade of locally manufactured goods in India, thereby multiplying investment and production of MSMEs.

India’s e-commerce landscape

Despite the high internet speeds and widespread smartphone usage, the majority of participants in the e-commerce are unable to reap the benefits of this digital revolution.

• India has the third-largest online shopper base globally, with 14 crore e-retail shoppers in 2020, only behind China and the US.
• E-retail penetration is only 4.3% in India; well below China (25%), South Korea (26%), and the UK (23%).

Observation

The COVID-19 pandemic exposed the critical shortcomings of the Indian digital commerce ecosystem when most parts of the retail chain were found to be digitally absent.

Platform-centric challenges

The current platform-centric nature of e-commerce presents numerous obstacles in making e-commerce accessible at the population scale.

Observation

The identified gaps are not limited to buyers and sellers alone but rather exist across all entities involved in the e-commerce value chain. 

How will ONDC change this? 

ONDC introduces an open-network for all the players who can sell or enable selling in an e-commerce setup (i.e), a shopping platform, seller, logistics partners and technology service providers. No single entity controls the end-to-end activities in buyers’ purchase journeys.

Here is a sneak peek into how ONDC works:

1.) In a snapshot: All buyers and sellers are connected through ONDC

How will ONDC change this?

ONDC introduces an open network for all the players who can sell or enable selling in an e-commerce setup (i.e), a shopping platform, seller, logistics partners, and technology service providers. No single entity controls the end-to-end activities in buyers’ purchase journeys.

Here is a sneak peek into how ONDC works:

2.) Mechanism: A transaction can be fulfilled by multiple entities operating independently on the network.

What ONDC aims to achieve?

In the next 5 years, there is a potential opportunity for market transformation due to ONDC.