ONDC Crosses 200 Mn Transactions Mark Over 2 Years After Inception

SUMMARY

The network, which has been consistently positioning itself as the UPI moment for ecommerce, said in a statement that it took 20 months to reach the 100 Mn transactions milestone

ONDC was launched to bring small merchants online and offer an alternative to giants like Flipkart and Amazon, which dominate the Indian ecommerce market

Currently, ONDC has presence in foodtech, consumer goods, financial services, and mobility segments, segments which continue to be dominated by more established players

State-backed network ONDC has crossed the 200 Mn milestone over 2 years after starting operations in January 2023.

The network, which has been consistently positioning itself as the UPI moment for ecommerce, said in a statement that it took 20 months (January 2023 to August 2024) to reach the 100 Mn transactions milestone. However, it crossed the next 100 Mn transactions mark in just six months.

The DPIIT-backed Section 8 company said that attaining the 200 Mn milestone is a testament to it transitioning from an ambitious initiative to a nationwide movement.

“Crossing 200 Mn transactions is more than just a milestone — it shows a paradigm shift in the way buyers and sellers are looking at digital commerce today… The speed at which ONDC is scaling is a testament to India’s readiness for a more inclusive and accessible digital economy. And this is just the beginning. There are many more use cases brewing within ONDC which will see the light of day soon,” the network’s CEO T Koshy said.

Democratising Ecommerce: ONDC was launched with much fanfare to bring small merchants online and offer an alternative to giants like Flipkart and Amazon, which dominate the Indian ecommerce market.

Unlike traditional platforms, the network doesn’t own or operate a consumer facing ecommerce platform but rather acts as an enabler for connectivity between different platforms.

For this, the network enables buyers and sellers from different platforms to transact with each other using standardised API. Under this, participants in the network operate as buyer and seller applications and logistics providers.

Currently, ONDC has presence in foodtech, consumer goods, financial services, and mobility segments.

What Is Hindering Rapid Growth? While the 200 Mn transactions mark is an impressive milestone, the number seems a bit underwhelming as it took the network 26 months to reach here.

Given that the ecommerce industry has been expanding rapidly, especially post the pandemic, this milestone could have been achieved much earlier.

While prominent names like Paytm, Ola, BharatPe, boAt, and Uber are participants on ONDC, the likes of Amazon and Flipkart have not joined the network. Pertinent to mention that Flipkart’s logistics arm eKart is a part of the network.

A 2024 report by electrical engineering society IEEE said that even though the network has been able to increase its presence over time, its growth lags behind major ecommerce platforms.

As per a research conducted by software consulting and technology services company FutureSoft last year, Amazon and Flipkart are estimated to process over 2 Mn transactions per day, dwarfing ONDC’s 287K.

So, what is hindering a more fast paced adoption of the tech? Experts are of the opinion that the ONDC faces key challenges like seller participant awareness and acquisition, overall cost of adoption, competition from established giants, as well as scalability issues.

The lack of a dedicated app may be another reason that ONDC has not gained much traction on the consumer side.

Despite all these, there is a lot of potential for the growth of the network. According to Inc42, the Indian ecommerce market is projected to surpass the $400 Bn mark by 2030, fuelled by a growing cohort of over 500 Mn online shoppers.