By Anand Parthasarathy
March 13, 2023:  Last week, Kudumbashree, Kerala’s acclaimed self-help group for women, announced that it had joined the Open Network for Digital Commerce (ONDC), the world’s first decentralized and interoperable e-commerce platform, bringing together multiple buyer apps and seller apps. 
Honey from the Idukki hills, mango pickles and organic pepper,  coconut oil for hair care and cooking – suddenly  products which had no retail outlets outside Kerala were available for delivery India-wide through  buyer apps linked to the new platform.  
ONDC is a non-profit entity created by the Indian government in December 2021 to address the domination of the online commerce business by a few players, enabling small players from neighbourhood kirana (grocery) shops to rural cooperatives to micro and small industries  to find new – hopefully all-India – markets for their products and services.
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For graphics about ONDC see Image of the Day
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In a global environment -- replicated in India –  platforms like Amazon and Flipkart have a near monopoly,  with 60% of all e-commerce business and  between them, some 15 lakh sellers on board. The result? The platform   is bigger than the partners -- and buyers have their choice limited to what each platform wants to push. 
What if one could search for a  product across multiple competing online seller  sites and  find the best deal?  That already happens with travel sites, where aggregators crawl across a number of   airline ticketing or hotel booking sites and highlight the best offers. 
ONDC aims to do just that – and more.    With all their dominance, the  e-commerce  players in India still  penetrate just 5-7% of all retail commerce in India according to a November 2022 report from  the India Brand Equity Foundation (IBEF), a trust established by the Union Ministry of Commerce and Industry.  There remains a vast untapped and unserviced sector of commerce and IBEF suggests that the India e-commerce market that was worth $ 75 billion last year could be $ 111 billion next year and $ 200 billion by 2026.
With multiple banks providing seed money, ONDC   had a low-key pilot in end-April 2022, in a few cities including Bengaluru, Bhopal, Coimbatore, New Delhi and Shillong, with the first transaction taking place in the Karnataka capital.  It was aimed equally at buyers and sellers and it worked like this:
-        Buyers had a choice of a small number of participating apps. As of this month they are: Craftsvilla, IDFC, Kotak, Meesho, Mystore, Paytm, Phonepe, Spicemoney. Once you revealed your location, the app told you what ONDC sellers were around you. You could also search for a specific product
-        Sellers could register themselves on a few sites like  SellerApp or MyStore  and they are guided through processes like Catalogue Management, Inventory, Order Management and Settlement
-        Logistics players like Delhivery, ShipRocket and Dunzo are already on the ONDC platform so that sellers who don’t have a delivery network of their own can sign up with one of these.
Since September 2022 when ONDC was fully operational, a number of technology players have joined and offer their expertise especially to potential MSME sellers. They include Magicpin which links shopping to  buyer savings for local retailers; Zoho which offers its e-commerce platform  to help  businesses create online stores and DBS Bank which in partnership with  e-Samudaay, a Software as a Service (SaaS) player, helps  MSMEs get onboard ONDC.
The fashion-focussed online seller Meesho has fully integrated its app with ONDC and others can be expected to follow suit – which is the whole reason for creating the ‘open’ platform.  MyStore is today the only ONDC app that  serves both buyer and seller.
But what about the elephant in the room, Amazon? In February it announced that it would integrate its logistics network (from pickup to delivery) as well as its SmartCommerce services for small businesses  , to build and scale their business across digital mediums.  This was a beginning: “We continue to explore other potential opportunities for stronger integration between the two in future… We remain committed to be being a catalyst for India’s digitization efforts throughout the economy”, said the company in its release.
ONDC is positioned to reduce the domination of Amazon and other e-commerce giants so it is difficult to see it embracing the new platform in any practical  way – but it makes sense for it to be seen to cooperate with  any government- supported initiative.
Six months after its full-function launch, how has ONDC fared?  Dozens of cooperatives like Kudumbashree have carved out a whole new national market.  But while no one disputes the compelling proposition it offers, ONDC is yet to make a big impact on buyers or sellers. The broad   spectrum  addressed may have dulled the focus: Is it the intention to attract the neighbourhood kirana shop – or extend the reach of small sellers to a nation-wide market?
When you install one of the buyer apps --  search for ONDC in Google Play and a few pop up --  and have localised it  for where you live, it is good at telling you of the shops and services around you, but less consistent  in   finding a specific product you want. That is a problem that will only go away with scale – and enquiries in some of the cities where ONDC has been around, shows useful searches are patchy.
The bigger challenge is this:  Will ONDC be attractive enough to wean users away from the Amazons and Flipkarts for products and from  Swiggy and Zomato for food items?  The catalogue   needs to be bigger.  
And for this government bears some responsibility. Regular Hosannas   in praise of the concept and ONDC’s potential to democratise e-commerce and loosen the grip of a few players will only go so far. There has been little by way of   sustained campaigns to increase public awareness even in cities where ONDC has claimed to have gone through alpha and beta launches – so lay persons can be excused for saying “ONDC –  woh kya hai?”  even a year after formal launch.
And for a government which has come up with any number of   memorable names and acronyms  in Hindi or Sanskrit for  its schemes, it is  surprising  that it has not yet coined a popular name  with good recall for what is  undeniably a worthy idea  that experts  already compare to the   Universal Payment Interface (UPI)  and digital payment apps  for their potential  reach and impact.
"In 2023, I foresee the first wave of innovation emerging out of ONDC, especially in technology and business”, says ONDC  CEO T.Koshy,  in a recent  survey in BusinessWorld. Many experts agree:
Says Susmit Patodia, Capital Director with Antler India, the global investor, in a blog on ONDC last week: “As it evolves, ONDC will face many challenges such as creating a critical mass of adoption, scam prevention, and implementing a reliable dispute resolution mechanism. However, as a technology protocol and innovation, the success of ONDC might redefine the global nature of commerce itself.”
Focussed marketing and awareness, might see ONDC reach a tipping point  sometime in 2023 or 2024, that will  make it  as ubiquitous as UPI – and yet another Indian innovation  whose impact will be felt beyond its shores.
Right now, it is a very promising work-in-progress.
This articlde has appeared in Swarajya