SUMMARY
ONDC aims at empowering local businesses by connecting them to the consumers
Competition will exist and thus, price and margins will be lower on ONDC than other ecommerce platforms
The government doesn’t want to put companies out of business but welcomes existing players to join hand on ONDC
The Indian government is quite upbeat about its ONDC platform. Time and again, different ministers and bodies have invited ecommerce players, buyers and sellers communities to join the network to make the maximum use of its reach and connectivity. Recently, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), Rajesh Kumar Singh stated that the motive to encourage companies and startups to join the platform is to democratise the ecommerce industry and empower the local businesses and MSMEs.
Singh made it clear that there is no intention to throw competition at any existing ecommerce company or put anybody out of business. But the motive, according to Singh, is to include all other ecommerce platforms as well.
This morning, (May 12) PhonePe reported that its ONDC app Pincode has surpassed 50,000 downloads and is already conducting 5000+ deliveries a day in Bengaluru. It also attributed the success to the idea of connecting the local sellers to the consumer base and offering services and products at a price much lower than most of the major ecommerce platforms.
This vividly aligns with the goal laid down by the government behind pushing companies to join the platform. Singh also added that though the government is not aiming to cut anybody’s margin, but as healthy competition is a part of the plan, margin will be lower than what most of the companies are keeping.
In the meantime, ONDC has become the talk of the town recently with the discovery of its lower price offering in comparison to food aggregators Swiggy and Zomato. For example, the McChicken Burger from McDonald’s costs INR 109 on ONDC, while Swiggy and Zomato charge INR 285 for the same.
Also, just yesterday ONDC announced that it has observed 25,000 daily transactions, a 500x jump in orders since January.
Further, the ONDC charisma is also touching traditional organisations like Axis Bank. After PhonePe, Axis Bank too is reportedly going to join ONDC with the launch of its own ecommerce platform.
Further, Google backed proptech unicorn NoBroker is reportedly going to launch on ONDC, which may be the first proptech app on the platform. Though ONDC and NoBroker did not respond to Inc42’s queries, top sources informed that currently, NoBroker is working on technical issues and will onboard ONDC as a buyer side app soon.
Last month, the government pinpointed ecommerce companies to join the ONDC with their primary platforms and not with any subsidiary app. Commenting on the same, Commerce and Industry Minister Piyush Goyal said, “I would tell Koshy (ONDC chief) to exclude those e-commerce platforms which are not coming to the network with their main platforms. Some are building ONDC-specific platforms. That’s not our aim.”
According to the Minister, certain companies are taking benefits of ONDC through new (subsidiary) apps, but these companies are not giving consumers the benefits of choices for buying from any of the sellers.
