Open Network for Digital Commerce (ONDC), the Indian government’s initiative to develop open e-commerce and democratise it for all players instead of a select few, is set to open for public trial soon. The company, for the past few months, tested the network with buyers and sellers. Thampi Koshy, in an interaction with Moneycontrol on the sidelines of the Retail Technology Conclave 2022, talks about the challenges that lie ahead for the open network and onboarding of sellers and buyers on the platform.
Please note, ‘buyers’ in the ONDC terminology refers to platforms that will let the end-users or consumers shop from ‘sellers’ or ‘seller aggregator’ platforms such as Snapdeal, Zoho, etc. Edited excerpts:
You have been running a pilot for grocery and food delivery for buyers and sellers. How has been the response?
During this pilot, we asked a certain set of merchants to make their catalogue visible to a cohort of consumers, whose number had been white-listed. These consumers, who were friends, colleagues, and customers of these merchant platforms, had the access to the platform and could buy on it. We did this so that merchants could get used to handling the network and to the idea of responding digitally. In fact, about 30-40 percent of the merchants are using digital commerce for the first time. We are seeing that both the seller and buying platforms are figuring out the nuances and the response is encouraging.
We feel confident that maybe by end of this month or the beginning of next month, we will be able to open the network for select towns for beta testing. We expect to experience a lot of challenges because many people are trying this for the first time. The one big difference between this and the launch of any other platform is that usually the launching entity has 80 percent under control, but here the launching entity does not have 80 percent under control. We have to be like a conductor in an orchestra, where the banjo, violin, and guitar players all need to be enabled to perform in unison. Nonetheless, it is encouraging the way it is shaping up.
Which buyer platforms are already live?
There's one buyer application (Paytm Mall) that is live today, but another three or four will go live shortly. We have various names like PhonePe, Kotak Mahindra Bank, IDFC First Bank etc. under various phases of integration.
Will you be conducting the beta trial only with grocery and food delivery players?
The ‘One District One Product’ mart of the Uttar Pradesh government is already live so home decor will also be there. We are enabling inter-city logistics to facilitate this. We are going live with Shiprocket in a few weeks. So, after that, a consumer in Bangalore might be able to buy ODOP products from Lucknow.
When are other e-commerce categories expected to go live?
In my opinion, most of the regular fashion categories such as fashion will be available in the next two to three months.
Which are the categories that will take time?
We are trying to onboard mobility, hotels, and tourism, etc. That might take a few months. At the end of it, everybody will see it makes sense.
Amazon and Flipkart control two-thirds of the e-commerce market. Is there any indication of them coming on board?
They have made a few announcements saying they are interested but they are yet to start integration with us. They are not in a hurry as their business is doing well. But eventually, they will come on board. It's a question of when and not whether.
Right now, however, there are more sellers than buyers on the platform…
In my opinion, the buyer platforms will be lesser than the seller platform as the buyer platforms will have a large audience but all of them collectively can bring one billion people. See, if Airtel whenever they go live, will bring 400 million straight away. The number of end-users will rise exponentially as these buyer platforms enable transactions for all their users.
How will you onboard smaller sellers?
Going ahead, there will be some technology service providers who will be interested in making an aggregator platform for small merchants. These small sellers will still get exposure to all the buyers. Today, we are so used to this closed loop and we have to break that model, and then we can see the possibilities that ONDC offers. It offers interesting possibilities, not just for B2C but even B2B. Take, for instance, a kirana store, which gets its products from wholesalers and stockists. These stockists do not just offer them products but also credit facilities. As the retailer starts selling using the open network, credit can come from the banking system. There are opportunities for both stockists and retailers.
Your vision is to reach the seller in the remotest parts of India. How will you create awareness?
It takes time but we have started working with the states to create evangelisation and special projects for small businesses. We are working with government agencies like SIDBI and also encouraging a lot of start-ups to come on board. We just recently did a hackathon with NABARD. But it's not a one-time effort. It's not just an event, it's a process. It's going to be a collective effort.
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