How ONDC is Democratising Digital Commerce for Emerging Brands

Authored by Ajay Rao, CEO & Founder, Emiza

The e-commerce landscape in India has long been dominated by a handful of large platforms, making it challenging for small businesses and emerging brands to compete. However, the Open Network for Digital Commerce (ONDC) is poised to change this dynamic. By creating a decentralised network that directly connects buyers and sellers, ONDC aims to level the playing field and democratise digital commerce. For emerging brands, this represents a significant opportunity, allowing them to reach a broader audience without relying on platform-centric gatekeepers. Since its launch, ONDC has facilitated over 68 million transactions, including 3.6 million in April 2024 alone. This demonstrates the potential of the platform and its potential to revolutionise digital commerce. 

Here's how ONDC is revolutionising digital commerce for emerging brands.

Inclusivity: Empowering Small Businesses and Local Stores

One of ONDC’s most transformative effects has been its inclusive model, which empowers small businesses, local stores, and underserved sectors to participate in the digital economy. Unlike traditional platforms that often pose high entry barriers due to technical, financial, and operational requirements, ONDC makes it easier for businesses of all sizes to enter the digital marketplace. This inclusivity has fueled ONDC's rapid growth, with orders skyrocketing from over 6 lakhs in September 2023 to 8.9 million across retail and ride-hailing segments by May 2024.  

Cost-Effective for Sellers: Lower Fees, Higher Profits

Emerging brands and small businesses often face high costs on established e-commerce platforms due to steep listing, transaction, and marketing fees. ONDC offers a cost-effective alternative, allowing sellers to list their products once and avoid recurring fees and high commissions. This reduction in operational costs enables brands to keep more revenue for reinvestment in products, customer service, and business growth, enhancing their profitability and long-term sustainability. Currently, ONDC hosts over 5.35 lakh sellers, with approximately 85% of them being small enterprises.

Direct Buyer-Seller Interactions: Building Relationships

ONDC also facilitates direct interactions between buyers and sellers, minimising the need for middlemen. This connection empowers sellers to manage customer relationships better, leading to improved communication and faster responses to inquiries. In a competitive market, this fosters loyalty and trust, often lacking in traditional platforms. Additionally, removing intermediaries can lower product prices for buyers while maintaining healthy margins for sellers, benefiting emerging brands seeking to establish their reputation and engage closely with customers.

B2B Expansion: New Growth Opportunities

While ONDC primarily focuses on direct-to-consumer (D2C) commerce, the network is also paving the way for business-to-business (B2B) interactions. Brands can leverage ONDC to connect with retailers, suppliers, and other business partners. For emerging companies, this creates new opportunities to diversify their revenue streams, expand their operations, and establish more efficient supply chains. 

Emerging Tech Startups: Fueling Innovation

The rapid growth of ONDC has also fostered the rise of tech startups that support the platform’s operations. These startups provide solutions in areas such as logistics, payment systems, and user experience, helping to ensure the network operates smoothly. The decentralised nature of ONDC demands innovation, and startups are stepping in to meet these needs, further expanding the platform’s ecosystem. 

Challenges: Navigating the Road Ahead

Despite its impressive progress, ONDC faces several challenges that need to be addressed for its continued success. These include ensuring a seamless user experience, building trust and transparency across the network, and managing logistics efficiently across a wide range of locations. As the network grows, maintaining consistency and quality will be key to maintaining seller and buyer confidence. Additionally, integrating various platforms and ensuring smooth coordination between sellers and logistics providers remains an ongoing challenge that ONDC must navigate carefully.

Conclusion

The ONDC is poised to contribute significantly to India's economy, with projections indicating an increase of $60-80 billion by 2030. The initiative aims to have e-commerce account for 25% of consumer purchases in India within the next two years. By prioritising inclusivity, cost-effectiveness, and the reduction of intermediaries, ONDC empowers small businesses to succeed in a rapidly evolving digital landscape. As it navigates challenges and expands its reach, ONDC is positioned to play a pivotal role in democratising e-commerce and fostering economic growth throughout the country.

 DISCLAIMER: The views expressed are solely of the author and Adgully.com does not necessarily subscribe to it.