We are not building the entire solution, we are building a component that people can plug in, which people can benefit from: ONDC CBO Shireesh Joshi
Introduced in late 2021, ONDC rose to prominence after launches in Bengaluru and Delhi, as daily average orders crossed 25,000 in May 2023
While ONDC has integrated 50+ network partners so far, nearly 10,000 companies have initiated integration with the platform
The Open Network for Digital Commerce (ONDC) will bring unique opportunities and scale for all parties involved in the platform, according to its chief business officer Shireesh Joshi.
Speaking at the Convention of Digital Entrepreneurs (CODE), held last month in Delhi, Joshi said, “Every scale of operator, every size of operator, every type of operator – when you accommodate all of that, (then) you’re really democratising ecommerce.”
Talking about the idea behind ONDC, Joshi said, “We are not building the entire solution, we are building a component that people can plug in, which people can benefit from, and benefit from ecommerce.”
Incorporate as a Section 8 company in December 2021, ONDC rose to prominence after launches in Bengaluru and Delhi, as daily average orders crossed 25,000 in May 2023, a 500X jump compared to the start of the year.
How ONDC Works
Joshi explained that ecommerce platforms can be divided into three aspects – seller interface, buyer interface and logistics. These aspects are bundled together via an ecommerce platform’s proprietary protocol, which makes them opaque.
Further, due to differences in protocols, no two ecommerce platforms are operable with each other. Since these ecommerce platforms are closed platforms, it ultimately leads to concentration around a few players.
ONDC, Joshi said, is unbundling the three activities across multiple specific players. “Now, different entities do different parts of the ecommerce value chain. There is still a protocol that connects them – you still get the same end result,” the CBO added.
To be sure, the government’s digital commerce protocol has since onboarded more than 50 network participants at each end of the ecommerce value chain.
For instance, the likes of Paytm, PhonePe’s Pincode and Mystore have joined ONDC on the buyer side, eSamudaay, Digiit and boAt have joined on the seller side, while Delhivery, Dunzo and Shiprocket have joined the network to deliver orders.
Further, nearly 10,000 participants have initiated integration with the platform across the ecommerce value chain as well.
“Unbundling is how we get to the most effective, efficient solutions in all of our lives, except in ecommerce. And so, it should not be a surprise that ecommerce entities are challenged profitably,” Joshi said, explaining the rationale behind unbundling the ecommerce value chain.
He said the interoperability gained via the unbundling of ecommerce will lead to the democratisation of the industry.
What Startups Can Do With ONDC
“At its heart, ONDC is a protocol. If we were Lego, we would only be the dimensions of that circular protocol. All of you (startups) will be the ones to decide what to build with it,” Joshi said while talking about what startups can achieve with ONDC.
He told startups and MSMEs that they only need to build a single component of the ecommerce value chain and then work with complementary partners to provide services after connecting with the network.
The network’s CBO also discussed several ideas that came up during conversations with the industry’s stakeholders. One of them included ordering on the move, which would allow a user to do a self-pickup of an order on the way to a certain location without having to figure out the exact time of when they might reach their destination.
“But if you could do just your piece of the jigsaw puzzle, take the other jigsaw pieces from the network, then you will have an opportunity to bring things together,” said Joshi.
ONDC’s Impact So Far
Operated by the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC commenced operations in August 2022, starting alpha testing across the country.
Since it first had its beta launch in September 2022 in Bengaluru, the network has expanded to more than 230 cities in India as of May 2023, hosting 35,000 merchants in May as against 800 in the first month of 2023.
ONDC has also emerged as a competitor, especially in the food delivery segment against the likes of Zomato and Swiggy, though several analysts have suggested that ONDC at its current scale is not a near-term threat to the two incumbents.
