According to Nilekani, ONDC will create a new class of ecommerce users
He said that Aadhaar registration, UPI and Jio launch boosted digitisation in India
Essentially, the Indian internet is not advertising led, but transaction led, he added
As the Indian government urges ecommerce platforms to join ONDC, Infosys chairman Nandan Nilekani is of the view that such businesses will need ONDC for the online purchases to reach 500 Mn from the current 80 Mn monthly transactions.
According to a Moneycontrol report, Nilekani said that ONDC will create a new class of ecommerce users who may not have thought of online purchases earlier. To avail the offers and convenience of ONDC to source goods from the neigbourhood stores, many will start navigating to the platform.
As per the report, Nilekani added, “The number of platforms which are in e-commerce will go up. It won’t be just two guys, but 10 guys. It might not benefit one guy, but it will benefit India.”
Addressing an event, Nilekani noted that four consecutive events in 2016 led to the rapid digitisation of India. He stated that Aadhaar crossing the 1 Bn registrations mark, UPI, and the launch of Jio made people lean towards the internet. These factors contributed immensely towards rapid digitisation of the country.
Nilekani furthered, while the growth of internet in the US is attributed to high advertising revenue of $862 per capita shifting online, the case isn’t applicable for India with a low $7 per capita. “We needed a different kind of internet infra than the West… Essentially, the Indian internet is not advertising led, but transaction led… Your transaction history is itself a form of capital that will be unlocked at scale,” he said.
The government has been encouraging companies to join the ONDC network a lot. It wants the ecommerce businesses to join the platform through their existing apps instead of a subsidiary app specifically developed for ONDC.
According to Inc42’s State of Indian Ecommerce Report Q1 2023, in 2022 the funding in the ecommerce sector average ticket size fell by 63% and 66% YoY, respectively. However, with high potential, the industry is expected to reach $400 Bn by 2030 at a CAGR of 19% from 2022. The report found that Indian ecommerce has received $31 Bn in investments since 2014 and boasts 24 unicorns and 15 soonicorns.
Nilekani has been vocal about the changing structure of the Indian economy and the tech sector. Recently, at another event he also said that the staggering Indian tech sector is definitely going to bounce back on its feet but nobody knows when.