The ONDC Revolution: Digitizing Indian Ecommerce

23rd November 2023


In the bustling heart of Visakhapatnam, Sanjeev, a 36-year-old local kirana store owner, dreamt of expanding his business beyond the neighborhood streets. The challenges were immense – high commission fees and limited reach.

Enter the dawn of a new hope on 31st December 2022- ONDC, the game-changer that transformed Sanjeev's world!

It connected him with customers nationwide, breaking the barriers of his physical store. Unlike traditional giants, ONDC didn't burden him with hefty fees. Instead, it empowered him to invest back into his business, fueling growth. With the freedom to choose affordable delivery methods, Sanjeev's dreams of expansion turned into reality.

In the realm of ONDC, Sanjeev found more than a platform; he discovered a community that could empower local dreams. His kirana shop became part of a nationwide network. ONDC's policy-centric approach welcomed small businesses like his, offering inclusivity and boundless opportunities. Sanjeev's story mirrors the aspirations of countless entrepreneurs. ONDC isn't just a platform; it's a lifeline, uniting dreams and businesses across the nation.

For Starters, What is ONDC?

The Open Network for Digital Commerce (ONDC) marks a paradigm digital shift in India's ecommerce landscape. At its core, ONDC serves as a vital bridge, connecting buyers and sellers in the digital realm much like the Unified Payments Interface (UPI) functions in the financial sector.

Transactions across Platforms Leveraging ONDC

Unlike traditional ecommerce platforms, ONDC operates on a decentralized, unbundled, and policy-centric approach. It eliminates the monopoly over the distribution and discoverability of goods and services, providing a level playing field for businesses. ONDC offers increased choice and competition, lower prices, discounts, and promotions. It stands as a “marketplace of marketplaces”, allowing buyers to freely engage with various platforms without restrictions.

By integrating vendors and eliminating commission fees, it empowers local entrepreneurs and MSMEs, allowing them to expand their reach without financial constraints. Sellers within the system have visibility into customer data and transactions, enabling them to make data-driven decisions, expand their customer base, and improve their business operations. ONDC also enhances user experience by centralizing services, eliminating the need for multiple applications, and providing a seamless interface for buyers.

In essence, ONDC is not just a digital platform; it's a transformative initiative fostering inclusivity, competition, and transparency in the Indian ecommerce ecosystem.

How is ONDC Re-imagining Indian Digital Ecommerce?

With the annual growth rate set to hit a staggering 107 billion dollars by 2027, the Indian ecommerce Industry is on an upward trajectory and is set to become a prominent player in the global arena. But one of the primary problems experienced by the country is the market penetration rate, especially for players in rural areas and small businesses which are not tech savvy- is unmet credit demand resulting in only 8% of Indians using ecommerce platforms. ONDC is poised to change the playing field of the Indian ecommerce market by democratizing credit access across all domains with an added focus on the inclusion of these small businesses and independent vendors by provisioning them with a centralized platform.

Let us delve into the various features of ONDC which is set to transform digital ecommerce in India:

1. Decentralized Approach:

By allowing multiple sellers to coexist without a central monopoly, ONDC ensures healthy competition. This fosters innovation, diverse product offerings, and competitive pricing, benefiting consumers with better choices and lower prices.

2. Policy-Centric Framework:

Clear policies and regulations create a secure environment for buyers and sellers. This transparency fosters trust, making consumers confident in their online transactions and encouraging businesses to operate ethically, enhancing the overall credibility of the ecommerce ecosystem.

3. Supporting Small Businesses (MSMEs):

ONDC's elimination of commission fees and support for small businesses enable local entrepreneurs to compete with larger players. It reduces operational costs, allowing small businesses to offer competitive prices. This inclusivity propels economic growth, generating employment and stimulating local economies.

4. Centralized User Experience:

With a unified platform offering diverse products and services, buyers can explore, compare, and purchase with unparalleled ease. This seamless experience not only saves time but also ensures that consumers have access to a wide array of choices at competitive prices. Buyers can explore diverse products and services under one platform without the hassle of navigating multiple apps. This seamless experience saves time, making online shopping more accessible and convenient for a broader range of consumers.

5. Data Security and Transparency:

Moreover, ONDC's emphasis on data security and transparent transactions instills confidence in businesses and consumers alike. Sellers benefit from transparent customer data and transactions, enabling them to make informed decisions and improve their services. This transparency not only fosters trust but also encourages businesses to invest in their growth, further propelling the ecommerce industry forward.

6. Interoperability Across Platforms:

ONDC simplifies integrations and transparent transactions to streamline business operations. Sellers can seamlessly manage their inventory, payments, and deliveries on this unbundled framework. This efficiency not only reduces operational costs but also ensures a smoother experience for buyers, leading to increased customer satisfaction.

7. Freedom for Sellers:

Sellers' freedom to choose their delivery methods allows them to optimize costs. They can select the most cost-effective and efficient delivery options based on their specific needs and locations. This flexibility helps sellers maximize their profits and provide competitive pricing to buyers.

8. Promotion of Healthy Competition:

Businesses strive to improve their products and services to stand out in the competitive market. This drive for excellence stimulates innovation and benefits consumers, who receive high-quality products, innovative solutions, and improved services, ultimately enhancing their overall shopping experience.

9. Government Backing:

One of the pillars of ONDC's strength lies in its robust support by the government and DPIIT. Endorsed and nurtured by governmental initiatives like Make In India, ONDC enjoys the backing of policymakers and visionaries. This support not only signifies the government's commitment to fostering economic growth but also ensures a conducive environment for businesses to thrive.

10. Fostering Economic Inclusivity:

ONDC acts as a catalyst, breaking down barriers that are monopolizing the Indian ecommerce space. Through its decentralized approach, it empowers entrepreneurs, allowing them to reach a broader audience without the burden of hefty commission fees. By providing a level playing field, ONDC nurtures a vibrant ecosystem where businesses, regardless of their size, can compete and flourish.

Epilogue: The Dawn of a New Era in Indian Commerce

In the vibrant tapestry of Indian commerce, ONDC emerges as a beacon of hope and opportunity. With the unwavering support of the Indian government, it has ushered in a new era, where boundaries blur, and possibilities are limitless. The transformative power of ONDC lies not just in its innovative features, but in its ability to empower businesses, amplify consumer experiences, and foster economic inclusivity.

As we traverse the landscape of this digital revolution, it becomes evident that ONDC is more than just a platform; it’s a symbol of India’s progress and resilience. ONDC not only empowered entrepreneurs like Sanjeev but also fueled the growth of Indian e-commerce. By democratizing credit access, promoting entrepreneurship, and integrating with government initiatives, ONDC is becoming a driving force behind India's economic inclusivity.

About Perfios:

Perfios Software Solutions is India’s largest SaaS-based B2B fintech software company enabling 900+ FIs to take informed decisions in real-time. Headquartered in mumbai, India, Perfios specializes in real-time credit decisioning, analytics, onboarding automation, due diligence, monitoring, litigation automation, and more.

Perfios’ core data platform has been built to aggregate and analyze both structured and unstructured data and provide vertical solutions combining both consented and public data for the BFSI space catering to their stringent Scale Performance, Security, and other SLA requirements.

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