Ease of doing business for MSMEs: Less than 10 lakh MSMEs transacting digitally out of almost 10 crore MSMEs in the country and less than 1 per cent of people buying products from MSMEs digitally talks about the vast opportunity existing in the business-to-business (B2B) space, said Vibhor Jain, Chief Operating Officer at the government’s open e-commerce network Open Network for Digital Commerce (ONDC).
“However, this sector faces a range of obstacles, including limited credit access, slim profit margins, and the need for quality assurance in online trade. To address these issues, it is crucial to build trust, effectively manage expectations online and standardise products to ensure purchasers receive the desired quality,” Jain said last week as ONDC expanded its scope with B2B transactions which are expected to support SME sellers in business expansion.
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“How do you enable thin margins to operate sustainably on a network and how do you build trust for any B2B transaction to happen? This is one of the significant reasons why B2B hasn’t taken off on the digital trails purely because of quality issues. This is due to a lack of standardisation. Every MSME may have different specifications for different products. So how do you bring more standardisation from the buyer perspective?” said Jain.
To tackle these challenges, Jain explained how ONDC enables transparency. It is about the product discoverability and pricing discoverability that can happen on an open network which makes ONDC a very strong value proposition for anyone to transact for B2B items on the network. Second is the efficiency that comes into the network as the moment you have enough discovery happening on the network and the choices to play around with, it brings in a lot of efficiencies, he noted.
With the launch of B2B commerce, SIDBI said it will work with various industry associations across the country for the next three-six months to bring onboard over 30 lakh to 40 lakh small business sellers on ONDC to help them expand their market and reach new buyers.
Also read: ONDC gives market access for small businesses to turn large: CEO T Koshy
“Till yesterday we were struggling to get the sellers on board but because we are now dealing with a segment which is much more educated and computer savvy and in the business of selling, the difficulty in bringing a vast number of small businesses within the GST framework would be eased,” said S Ramann, Chairman and Managing Director, SIDBI.
ONDC is currently present in around 240 cities with a “couple of hundred transactions happening in at least 20-25 cities every day. Among categories, grocery and food does around 15,000 transactions daily while mobility has also picked up really fast with 35,000-40,000 rides a day in Bengaluru and Kochi,” said T Koshy, CEO, ONDC during the launch of B2B commerce.
