SUMMARY
ONDC CEO said that the order fulfilment rate of 2,200 transactions stood between 60% to 80%
ONDC will give strength to the small merchants to compete with large players, said Union Minister Piyush Goyal
Meanwhile, Indian startups raised $22.9 Bn in funding in first ten months of 2022, down 30% compared to the same period last year
Union Minister Piyush Goyal said that the state-backed Open Network for Digital Commerce (ONDC) has already facilitated more than 2,200 transactions on the network.
Goyal made the comments while addressing a press briefing on the open network in Bengaluru on Friday (November 18).
Noting that the beta launch of ONDC in Bengaluru had fetched good results, the Minister said that such ‘massive game-changing technologies’ require a long testing phase. He further added that, after Bengaluru, the open commerce project would be extended to more cities with a wider range of products.
Chiming in, ONDC chief executive officer (CEO) T Koshy said that the order fulfilment rate of the said 2,200 transactions stood between 60% to 80%. Breaking down the data, he added that 70% of these orders were groceries while the rest 30% belonged to the food category.
Koshy also noted that as many as 22 pincodes across Bengaluru were currently operational on the network, adding that ONDC so far had 21 active network participants. Of these, five were purportedly buyer apps, three were logistics firms and the rest were on the seller side.
The platform also plans to add categories such as fashion and apparel, home decor and electronics by the end of the year.
Touting ONDC, Goyal also said that the open ecommerce network had the ability to transform ecommerce across the globe and would open up more options for buyers and sellers.
“It takes everybody onboard like UPI did. It will give strength to the small to compete with the large. Through ONDC, we will try to bring all platforms onboard into the network of protocols and once more people come onto ONDC, buyers will have more choice,” he said.
More buyers and sellers will join the network as traction builds which will lead to many startups mushrooming all over the country instead of concentrating power and wealth in the hands of few, added Goyal.
Meanwhile, Goyal also addressed reports that the Reserve Bank of India (RBI) had stalled the National Payments Corporation of India’s (NPCI’s) plans to acquire a stake in ONDC. He said that the department had enough money and investors lined up for the project in the event that there is a conflict of interest.
RBI had raised questions over NPCI’s attempt to build the payments and settlement system for ONDC while, at the same time, acquire a stake in the network.
The Startup Mania
Later in the day, Goyal also addressed the 25th edition of the Bengaluru Tech Summit in the city. Speaking at the mega event, the Minister noted innovation and problem-solving approach of the homegrown startup ecosystem would help the country acquire global dominance in the sphere of technology.
“Over 40 out of the 100 unicorns are housed in Bengaluru and a huge ecosystem has been created here in the form of private equity investors, venture capitalists, research and development (R&D) centres, incubation centres and a big pool of very high quality of talent,” added Piyush Goyal.
Calling Indian startups force-multipliers, he said that Indian startups were almost playing the role of a booster dose in India’s post-pandemic recovery.
This comes amidst the government’s growing focus on Indian startups. Describing its scale, Goyal, last month, had pegged the ecosystem at around INR 3 Lakh Cr with more than 80,000 startups currently registered with the government.
The union government last month, also approved a credit guarantee scheme for startups, under which authorities will provide credit guarantee of up to INR 10 Cr against startup loans issued by lending institutions. In September, minister of state (MoS) Rajeev Chandrasekhar also said that the government was planning to offer financial assistance to bootstrapped startups.
Despite these efforts, Indian startups appear to be going through their worst phase. The onset of purported funding winter and negative market sentiment has wreaked havoc across the space.
In the first ten months of 2022, Indian startups raised $22.9 Bn in funding. This is a significant drop compared to $32.9 Bn raised by homegrown startups during the same period last year. Compared to 44 startups that turned unicorns in 2021, just 21 players have made it to the elusive club this year so far, with two months remaining.
The space has also seen seeing mass layoffs, with startups firing more than 15,700 employees so far this year. Many such as celebrity engagement startup GoNuts have shut shop while edtech decacorn BYJU’S has wound up operations in many cities of the country.
With no path to profitability and mounting losses, the entire landscape appears to have imploded into itself. While all may seem gloomy, the market conditions have forced course correction for many startups. Many have stopped splurging on unnecessary items and have set their eyes on sustainable growth and unit-positive economics.
