ONDC makes content-to-commerce pitch to news media platforms 

The government-backed e-commerce network’s pitch to media companies is that they can capture more value by making readers make e-commerce purchases on their platforms, instead of just advertising.

After tech unicorns, restaurant chains, and FMCG majors, the Open Network for Digital Commerce (ONDC) is trying to attract a new breed of participants to the network: news media platforms.

The government-backed e-commerce network’s pitch to media companies is that they can capture more value by making readers make e-commerce purchases on their platforms, compared to just advertising.

A memo floated around by ONDC for media companies said, “Traditionally, media houses have been able to use this to convert into both economic incentives for them and value-addition to their consumers through advertising or affiliate marketing. However, this distances them from the point of most value generation, i.e. the platform where the actual transaction of buying a product or service, and hence limits both how much they can charge, and the customisability of the offers they show/provide.”

It further added, “With ONDC, e-commerce is unbundled. Therefore, media houses can enable their consumers to directly transact using their channels, while other professional players take care of sellers, bringing together inventory and catalogues, as well as other services to fulfill a transaction. The media house can thus focus only on tailoring the offering to the best use of the customer from the universe of products and services available, and move from advertising to demand generation directly.”

The first news platform to experiment with ONDC is the digital arm of Dainik Jagran, a large media firm which largely operates in the Hindi news space. It is already in the advanced stages of integration with ONDC and is expected to start operating in e-commerce segments like fashion, home & kitchen, groceries, and electronics in the next few weeks.

Meanwhile, sources said that ONDC is trying to convince another big media house, which has a strong presence in the print segment,  to join the fray.

This comes at a time when news media platforms are struggling to retain their ad revenues as tech giants like Google and Meta grab an increasing share of the market.

According to a recent report by EY-FICCI, online news had a reach of 456 million in 2023, compared to 574 million smartphones in India. By 2026, it is expected to reach over 500 million users.

However, the consumption would not necessarily be on news apps or portals, but could shift to social media, D2C apps, aggregator apps or any place with a large online audience, said the report. As such, monetisation of news content on digital has become a challenge.

"The integration of Khojle.com, an e-commerce venture by Jagran New Media in partnership with ONDC covers the entire suite of Jagran news and information platforms, including HerZindagi.com, OnlyMyHealth.com, and JagranJosh.com, etc., as well as the mobile apps for all leading platforms," Gaurav Arora, chief operating officer of Jagran New Media, told Moneycontrol in an e-mail.

"These niche platforms have diverse audience segments, ranging from lifestyle and health enthusiasts to students and job seekers. Together, these platforms make up a strong network with more than 80 million monthly active users, solidifying our efforts to scale e-commerce into our existing digital community," he added.

Further, Jagran New Media is planning to broaden the offerings via ONDC to include a variety of consumer durables, diversify into health & wellness, beauty & personal care, and F&B, and eventually explore entering financial products and services.

Karan Taurani, a media sector analyst at Elara Capital, said, “News apps have a very small monthly active user base and regional language platforms have a smaller user base compared to English language platforms. The top English news platforms would have MAUs not exceeding 30-40 million, compared to a consumer tech app like Paytm that has 100 million MAUs. It is not going to be easy for news media platforms to do e-commerce”.

However, ONDC has created a renewed interest in the Indian e-commerce sector as tech unicorns, such as Ola, PhonePe, Meesho and Shiprocket, and FMCG majors like ITC and Unilever are taking a bet on the government-backed ONDC that is aimed at breaking the stranglehold of a few players like Amazon, Flipkart, Zomato and Swiggy on online retail in the country.

The volume of monthly retail purchases on the ONDC grew six times in six months to hit 3.6 million in March, compared to over 600,000 in September last year, according to people close to the developments.