Paytm will bring 10 million merchants to ONDC by end of 2025: Vijay Shekhar Sharma

Paytm founder Vijay Shekhar Sharma said that ONDC will open up the e-commerce opportunity for a lot of players as it breaks down different parts of a transaction such as seller, logistics, and payment into separate parts.

Paytm will onboard 10 million of its merchants to the Open Network for Digital Commerce (ONDC) by the end of 2025, the fintech unicorn's founder and chief executive officer Vijay Shekhar Sharma said on December 4.

"Commerce is a natural extension for us. We are committing to sign up at least 10 million merchants on ONDC before 2025 ends," he said at ONDC's hackathon in Delhi on December 4.

Sharma said that 11.8 million users had already shopped on ONDC through Paytm.

"This means that ONDC has already become a significant player in e-commerce. There are around 50 million e-commerce users in India and over a fifth are already on ONDC," he added.

The Paytm founder said that ONDC will open up the e-commerce opportunity for a lot of players as it breaks down different parts of a transaction such as seller, logistics, and payment into separate parts. In effect, a single player doesn’t need large amounts of funding to build all the parts to break into the ecosystem.

"All the overheads that a monolith e-commerce system requires will be ended by ONDC. And the consumer value will be completely superior when compared to a single platform," he said.

"ONDC may be the third front of e-commerce, but sarkaar hum hi banayenge (but we will come out as winners)... Together we will be more powerful than any single e-commerce platform," he added.

In a move signaling Paytm's renewed focus on e-commerce, the fintech giant has been testing a feature that prominently positions shopping via the ONDC option on its homepage, alongside the QR code scanning functionality for payments.

While Paytm was the first buyer-side app on ONDC, the feature was typically being moved around between different scroll lengths, from the top to somewhat deep down, depending on offers until recently. The pilot of the new feature keeps ONDC alongside scanning QR codes for payments static on the home screen even as the user scrolls through the page length to check out other products like ticket bookings, games, share trading, etc.

Moreover, the app has also re-designed its landing page for ONDC shoppers which carries a masthead that reads ‘Paytm loves (heart symbol) ONDC’. The new landing page boasts a cleaner look, with banner ads announcing deals and clickable options for the buyer to directly go to categories like food, grocery, electronics, fashion, etc.

This comes at a time when multiple tech unicorns, such as Ola, PhonePe, Meesho and Shiprocket, have taken 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.

To be sure, Paytm said last year that it has no direct or indirect shareholding in Paytm Mall (Paytm E-commerce Private Limited), the buyer app entity that transacts with consumers on the fintech app. Paytm Mall is not a part of the One97 Communications (OCL) group, although it uses the Paytm brand and receives other services from OCL.

Paytm Mall has already burnt its hand in e-commerce once before. It had raised $400 million from investors like Alibaba and SoftBank at a valuation of over $2 billion in early 2018. However, that bet went sour as Alibaba sold its entire stake in the company at a valuation of just over Rs 100 crore in 2022.

Around the same time last year, it announced a pivot to the ONDC model wherein every part of the transaction — buyers, sellers, logistics and payments are dis-aggregated into separate modules. In effect, the ONDC model allows a scenario where one player could be the interface for buyers, a different player could onboard sellers and a third one might be doing the logistics of the delivery.