ONDC to democratise e-commerce in India: Report | The Financial Express

ONDC to democratise e-commerce in India: Report

A report by Publicis Groupe and Digital India Foundation offers some directions to brands on leveraging the govt’s Open Network for Digital Commerce

E-commerce contributes only 7.8% to the overall total retail sales
E-commerce contributes only 7.8% to the overall total retail sales

ONDC will unbundle e-commerce components and leverage open protocols so that the components are interoperable in the network, a report by Publicis Groupe in partnership with the Digital India Foundation (DIF) said. says The report called ‘Decoding ONDC – Perspective for Marketers’, released ahead of the national rollout of the government’s ambitious digital commerce project, the Open Network For Digital Commerce (ONDC), by Q1 of CY23, aims to offer pointers to brands about leveraging open networks for best results.

Anupriya Acharya, South Asia CEO, Publicis Groupe, said: “ONDC’s readiness requires cross-functional capabilities in planning, technology, experience, content, discovery, and commerce operations. It is critical that all marketers understand the implications on their businesses and brands. Through this report, we will facilitate our clients with the right information to get started and leverage the opportunities presented by the network.”

ONDC promises to enhance product discoverability while increasing customer reach and reducing the cost of sales.

Arvind Gupta, ONDC board member, co-founder and head, DIF, said: “The success of digital public goods in identity, payments and social welfare disbursements in India is based on two principles: trust in technology and value co-creation. ONDC aims to incorporate these principles to democratise e-commerce in India.”

According to the India Brand Equity Foundation (IBEF), India’s consumer digital economy is expected to become a $1-trillion market by 2025, growing from $537.5 billion in 2020. E-commerce penetration increased fivefold between 2020 and 2022 alone in the country. However, a large portion of the retail sector is not digitally enabled. No wonder, e-commerce contributes only 7.8% to the overall total retail sales. Though e-commerce has a lot of room to grow, the fact that two/three large players control approximately 80% of the market means that new bootstrapped startups in the online retail sector face major entry difficulties.

Also, without meaningful participation from smaller players, the larger players with high market shares also hog valuable market data. As the network aims to cover 75% of PIN codes across India, over 250 million buyers will be able to purchase goods and services and more than two million retailers will be enabled with e-commerce.

In April 2022, ONDC launched a controlled pilot in 20 cities; in September it started with categories like groceries, food and beverages for the beta test in Bengaluru. Next month, it plans to add home and kitchen, agriculture, fashion, apparel, footwear and accessories across India. By March next year, it will also include beauty and personal care, electronics, toys and baby products, travel services, and financial services. A nationwide rollout is expected by the first quarter of calendar 2023.

For the report, Publicis conducted a detailed survey with the C-suite and brand leaders, in addition to interviewing top executives of ONDC. As per the survey, around 60% of respondents saw increased product discoverability, 80% witnessed increased customer reach, and around 60% saw flexibility due to reduced dependency on large marketplace providers.

While there is a lot of excitement, there are some apprehensions too. About 73% of the marketers said they’re watching the space of goals and responsibility and how customer service gets addressed via ONDC. Also, because it sees itself as a facilitator rather than a regulator, ONDC does not specify how to handle returns, refunds and cancellations. But it has suggested a number of measures to build trust in returns, refunds, and cancellations through transparency and contracts between the buyer and the seller.

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First published on: 25-11-2022 at 08:31 IST