ONDC a win-win for consumers as plethora of shopping options open up

Sellers too stand to gain from lower commissions and more customers

As the Open Network for Digital Commerce (ONDC) — a digital network which connects buyers and sellers — is all set to open to the public this month, both retail and wholesale customers will have the option to buy from any vendor that has registered on the network.

However, experts believe it will take some time for the network to develop as a concept as this is the first such initiative anywhere in the world. It will provide another option to consumers to buy online. 

The distinction of the network is that all sellers will be found by all buyers irrespective of the platform from which they access ONDC’s seller base. 

Simply put, if a buyer logs onto ONDC from Paytm, he or she can see the product he or she is searching for not only from Paytm sellers but also Snapdeal and other sellers registered on ONDC.

“Marketplaces have evolved to a stage where offtake has a major role in listing and searches. Top brands get a disproportionate share of visibility, which could be uniform for a larger section of brands under ONDC. The network is definitely meant to democratise and expand reach for sellers and brands,” Angshuman Bhattacharya, national leader, consumer products and retail, EY India, told Business Standard. So far, 17 financial institutions jointly have a stake in ONDC.

Smaller sellers (including kiranas, toy sellers and apparel shops, among others) will be able to participate on the network and ecommerce will become more accessible to them. Also, there is no platform lock-in for the consumers or sellers. It wipes out the notion that some products are available exclusively on one platform.

Product manufacturers and sellers would have to offer more competitive prices and services, which would mean better deals for the consumer.

On the issue of customer experience, Bhattacharya said, “Building customer experience is a journey that ONDC would need to embark on across categories. This is expected to take some time to build the right data and insights. There are consumer expectations and obligations that any platform will need to reciprocate and it may take a few years to stabilise.”

Rajat Wahi, partner at Deloitte, believes that vendor onboarding and verification to ensure quality and genuine products, promotions and discounts offered, among others, will need to be monitored. Also, range and assortment, pricing and product information and data privacy, among others, on the network will need to be taken care of.

He added that ONDC will function like another site/platform that is available to consumers to shop at. It will also ensure that all vendors/sellers have access to consumers and will take time to scale up.

“It is definitely a win-win for consumers as it could become a very large network over a period of time as more and more sellers and buyers use the platform,” Wahi said. 

Sellers are also at an advantage as they can list without really paying a significant commission to an ecommerce player and everyone can list their products and services on it.

T Koshy, chief executive officer (CEO) of ONDC said for every application that consumers use to buy products/services, they usually have to create an account. This requires them to share their personal information.

“Managing personal information across multiple platforms with multiple terms of service can be a challenge for a lay person. ONDC would obviate this by allowing a consumer to purchase any product or service from any seller on the network through a single buyer application. This will potentially make it easier to manage online privacy for the consumer,” Koshy said.

If a customer wants to return a product, the network has put a process in place. As ONDC prepares to open to the public in Bengaluru, it has already onboarded eight platforms and is in an advanced stage of adding another 25. It has also garnered interest from various other platforms, which include telecom majors and banks, according to a source. 

Platforms that have already integrated with ONDC include Paytm, Digit, eSamudaay, Go Frugal, Growth Falcons, Seller App, Dunzo and Loadshare. 

Platforms that are in advanced stages of development with the network are PhonePe, Snapdeal, Kotak, Sonata, Ushop, Zoho, Ekart, Shiprocket and Bizom, among others.

The platforms that have shown interest include State Bank of India, HDFC Bank, ICICI Bank, IDBI Bank, India Post, ITC store, Marico India, Nivea India, Samsung India Electronics, Delhivery and Airtel, among others. 

ONDC intends to increase the gross merchandise value (GMV) of digital transactions from Rs 4.5 trillion annually to over Rs 7.5 trillion in the next five years.