Digital commerce will no longer be anyone's "father's property" and when every buyer would come into the open network the market would become a billion plus, says T Koshy, CEO of Open Network for Digital Commerce (ONDC), a UPI-type protocol for voluntary adoption by sellers or logistics providers or payment gateways. Speaking to CNBC-TV18 at the Digital India Vision Summit, Koshy said the digital commerce sector is going to inevitably get bigger, and large e-commerce companies cannot claim their superiority over other companies. Excerpt from the conversation:
What are the major challenges going forward in private players playing a role in ONDC?
First of all, when we say open-network what it is attempting is to democratise. It means that everybody has the opportunity to present what they want to offer. Nobody can claim superior power because of the captive set of users, on any side of it. So the scale ceases to be the lever but innovation and specialisation become the lever. So whether you are small or big, you have an equal opportunity to be discovered. And if you have something really good to offer, then you get discovered more.
In that context, when ONDC enabled a large number of unbundled specialised building blocks of commerce… there is no conflict of interest and it becomes inevitable for everybody to join.
When every buyer comes together in the open network, the market becomes billion plus. It’s nobody’s father’s property. So now, if somebody decides that I have a small group of 50 million people, he becomes irrelevant. It becomes a natural compulsion for current large players to come.
When you say large, does that mean they have a predominant market in India?
No. We understand that the total market penetration of digital commerce is only 7 percent and on the seller side less than 1 percent. So, when it has to reach 50-60 percent, everybody has to grow. Then today’s biggies become irrelevant if they don’t cope up.
So you are saying it is inevitable for even larger companies to come on board and be a part of the system?
Yes, it is inevitable because when the 7 percent penetration becomes 50 percent, you need a lot more to come. You saw the same thing happen with UPI. So it is not taking anybody’s market, it is collectively attacking a larger market. As admission by the government and honourable prime minister, all of us are going to be digitally enabled, doesn’t matter big or small.
Being a part of the Digital India Mission, you have given yourself a target of hitting 100 cities and growing organically, how far ahead have we come ahead in that roadmap and how much more time will it take for us to hit that target?
Let me put a context for you. The way ONDC is set up, it is a network. Network means there have to be multiple entities coming together to transact amongst themselves. There is no central platform. In a normal conventional launch of a bank, or a stock exchange or anything, there could be a central platform which is 80 percent in your control.
Whereas, when you are creating a network, you are giving them a language and the grammar and telling everybody to talk. So then, it would mean that the one way to test it is to organically grow by getting more and more people to talk. And the scope of ONDC is very broad. It could cover commerce, it could cover services, and even in commerce, there could be grocery on one side, fashion on other side.
To make sure it happens organically, we took up the most challenging part of it -- the last mile -- which is grocery and food. And we said let’s do it in a small and steady fashion, let’s first look at five cities across different parts of the country, and bring some sellers, some buying platforms and logistics together to transact in a controlled environment.
Since, it is to have participation from very many people, after having started in five, let’s keep adding to that number. We put ourselves a target for going broader to have a capitalist in every town.
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