T Koshy, CEO of the Open Network for Digital Commerce opens the Paytm app and goes to the ONDC section to order a salad from a restaurant nearby, only to find out that the eatery is not open, but it’s the place that he always orders from, but what’s the fuss about ordering a salad from eatery through Paytm and why should you care!?
Now, hold on for a second and get ready to take a deep dive into why should you care!
But before anything, let’s nail down what ONDC is and what it does.
ONDC is basically India’s counter to the dominance of large, investor-fuelled online marketplaces and aggregators and is a de facto online commerce inclusivity platform for small vendors.
To Keep the Dominance of Ecommerce Giants in Check
T Koshy, CEO of ONDC said that “The problem that ONDC is trying to solve is not just a developing-country problem. Today, (the dominance of ecommerce giants) is a problem everywhere… these guys have become so big that it’s uncontrollable.”
Let’s look at the seller as well as buyer sides of ONDC. The seller side on ONDC is crowded with a rush to onboard small merchants, and the buyer side is sparse, with only Paytm Mall fully onboard and running pilots.
The spokesperson of IDFC First Bank and PhonePe said that they are launching ONDC-compatible shopping platforms shortly.
However, the major players like Amazon and Flipkart, which command about two-thirds of India’s digital commerce market, remain elusive.
This does not disturb Koshy however, he says that “In the future, anybody who has got anything to sell—products or services—will make their catalogs visible in this common network (ONDC), either by themselves or through a third-party aggregator or a technology service provider. So, everybody will have commerce; there (will be) no separate need to have an ecommerce company… Amazon will also exist, Flipkart will also exist, (but) they will all become part of this common pool.”
As ONDC democratizes the space with more players coming in, the ecommerce sector will likely undergo significant changes for a majority of the participants. He said that “Ecommerce (as it is practiced now) will become irrelevant.”
Pilots in Few Cities
Since April, ONDC has been testing grocery and food delivery since in select few cities, but these are the cities that have been intentionally those which are toughest to crack.
He said that “We took up the very difficult ones (to begin with)—grocery and food—because these can only be hyperlocal. And that’s a very painful one. We wanted to see (how) a difficult thing could work.”
However, he won’t have a tough time ordering salad next time around, once ONDC is available to the public.
Paytm was the first to launch an ONDC platform for shoppers, followed by IDFC First Bank. PhonePe confirmed it will be launching a consumer-facing app as a part of the ONDC network shortly, and that it would first be piloted in Bengaluru.
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