India's Open Network for Digital Commerce (ONDC) has experienced a rapid increase in its retail orders per day, doubling to over 10,000 in just one week, due to stepped-up marketing efforts and rapid addition of sellers. This is an exciting development for ONDC, which seeks to prevent the dominance of a few large platforms in e-commerce and food delivery sectors like Amazon, Flipkart, Swiggy and Zomato. With the network, the government hopes to increase e-commerce penetration in the country to 25% in the next two years, reaching 900 million buyers and 1.2 million sellers through the network and reaching a gross merchandise value of $48 billion.
ONDC's total merchant base has shot up to over 93,000 currently, from around 800 in December 2021, after it launched an incentive scheme for seller-side apps to enroll merchants. Of the total seller base, 35,000 are from non-mobility categories like food, grocery, home décor and electronics.
Bengaluru and other major cities like Mumbai, Delhi, Kolkata and Hyderabad account for 40% of these orders, while the remaining 60% are from over 200 other cities where the network has launched its pilots. ONDC classifies sales of food, grocery, home décor, electronics etc. as retail, whereas booking of cabs and autos on the Namma Yatri app are categorized as mobility.
The network is also seeding consumer demand by giving discounts of Rs 50 per order. As part of its next leg of growth, ONDC plans to tie up with agri product aggregators to enable farmers from distant corners of the country to sell online. Consumers can expect to buy any agricultural product straight from the farms, be it pure honey, saffron or millets.
ONDC is banking on three key pillars to reduce the cost of doing business for everyone, including retailers: dynamic pricing, inventory management, and delivery cost optimization. Top FMCG players like Unilever, ITC, Dabur, and Nivea, and banks like Kotak Mahindra and IDFC First are in various stages of integrating with the network.
ONDC's Chief Executive Officer, T. Koshy, said, “We have been reaching out to influencers for marketing the network. Even other network participants like seller and buyer-side platforms are promoting it more as the processes are getting settled.” However, he declined to comment on the exact number and demographics of orders being processed by the network or its participants.
The success of ONDC will be important in achieving the government's goal of boosting e-commerce in India. The network's architecture is designed on the guardrails of software developed by the Beckn Foundation, a non-profit backed by Infosys chairman Nandan Nilekani, with the aim of replicating the success of the United Payments Interface (UPI) in digital payments for digital commerce in India.
In conclusion, the growth of ONDC is an exciting development for the e-commerce industry in India, as it seeks to level the playing field and prevent the dominance of a few large players. With its rapid growth in retail orders and its plans to tie up with agri-product aggregators, the network is positioning itself to become a key player in the Indian e-commerce industry.