By ITTeam Prime Minister Narendra Modi has lauded the Open Network for Digital Commerce (ONDC) for its transformative impact on India’s e-commerce sector. In response to a social media post by Union Commerce and Industry Minister Piyush Goyal, PM Modi remarked, “ONDC has contributed to empowering small businesses and revolutionising e-commerce, thus playing a vital role in furthering growth and prosperity.”
Empowering Small Businesses
Launched in 2021, ONDC aims to democratize the digital commerce ecosystem by creating an open, inclusive network that enables small and medium enterprises (SMEs) to compete with established e-commerce giants. By providing a level playing field, ONDC facilitates broader market access for local businesses, artisans, and entrepreneurs, fostering economic growth and inclusivity.
Impressive Growth Metrics
Minister Goyal highlighted ONDC’s rapid expansion, noting that the network now encompasses over 200 participants, including more than 700,000 sellers and service providers across 600 cities nationwide. Since its inception, consumers from over 1,110 cities and towns have engaged in more than 150 million transactions via the platform, underscoring its widespread adoption and effectiveness in bridging the gap between buyers and sellers.
Future Projections
ONDC’s Chief Executive Officer, Thampy Koshy, has set ambitious targets for the platform, aiming to achieve 30-40 million monthly transactions by March 2025. As of November 2024, the platform recorded 14.4 million monthly transactions, indicating a steady trajectory toward its goals.
Diverse Participation Across Sectors
The platform has attracted a diverse array of participants from various sectors, including food delivery, e-commerce, and ride-hailing services. Notably, Ola Consumer (formerly Ola Cabs) recently piloted its quick food delivery service in Bengaluru through ONDC, exemplifying the platform’s versatility and appeal to different industries.
Integration of Startups and Unicorns
In 2024, ONDC expanded its network by onboarding several startups and unicorns. Companies such as Zerodha, EaseMyTrip, Cars24, Physics Wallah, PolicyBazaar, OfBusiness, WinZO, Livspace, and GlobalBees have signed letters of intent to partner with the platform, reflecting a growing confidence in ONDC’s potential to reshape digital commerce in India.
Challenges and Considerations
Despite its successes, ONDC faces challenges, particularly in raising awareness among consumers and ensuring consistent sales performance for participating brands. For instance, True Elements, a healthy breakfast and snack startup, experienced a decline in sales through ONDC in 2024 compared to the previous year. The company’s leadership cited a lack of platform awareness as a contributing factor, indicating the need for enhanced marketing and consumer education efforts.
Government’s Vision for Digital Commerce
The Indian government’s emphasis on digital public infrastructure, exemplified by initiatives like ONDC, Unified Payments Interface (UPI), and RuPay, aims to democratize e-commerce and payment systems. These efforts are designed to make it easier for homegrown companies to adopt digital-first approaches within a plug-and-play system, thereby fostering innovation and economic development.
Conclusion
Prime Minister Modi’s commendation of ONDC underscores the platform’s pivotal role in transforming India’s digital commerce landscape. By empowering small businesses and creating a more inclusive e-commerce ecosystem, ONDC is poised to drive significant growth and prosperity in the years to come. As the platform continues to evolve and expand, addressing challenges such as consumer awareness will be crucial to sustaining its momentum and achieving its ambitious objectives.