News & Analysis

ONDC Targets a Capitalist in Every Indian Town

The Open Network for Digital Commerce (ONDC) has been scoped out to become a network potentially capable of covering commerce, from grocery and food to fashion and travel to eventually cover services. This could result in over a billion people transacting in the country’s digital marketplace. 

Clarifying the scope of India’s latest experiment with eCommerce protocols, ONDC CEO Thampi Koshy said once this scale is achieved, digital commerce would cease to be “anyone’s father’s property” and if someone with 50 million people decides that this is the limit, he becomes irrelevant. 

Koshy made these comments at the Digital India Vision Summit in a chat with CNBC-TV18. “It means that everybody has an opportunity for what they want to offer. Nobody can claim superior power because of their captive set of users,” he said while reiterating that the eventual purpose is to broaden the network to an extent where every town has a capitalist. 

The not-for-profit enterprise is racing against time to go live with the set of eCommerce protocols that includes onboarding merchants. It has a horizontal and vertical growth strategy whereby horizontal growth is expected through the involvement of frontrunner merchants to act as catalysts in their respective cities. On the vertical size, it hopes that growth would entail opening up to the public at large. 

Success would eventually depend on the interfaces that get built between buyers and sellers onboarded on the network along with payment gateways and delivery fulfillment. While Paytm is active on the buyer side, companies such as eSamudaay, Growth Falcon, Gofrugal are live on the seller side with Dunzo and LoadShare providing the logistics. 

Anup Pai, co-founder and CEO of local commerce platform eSamudaay, which offers a ready-to-use toolkit to digitize buyers, sellers and local delivery agents, says quality of service would play the differentiator. “Seller apps that think of themselves as digitization agents need to take responsibility for quality, be it of a product or service or even the logistics. 

He believes that a business operating within a community has less chances of doing something detrimental to that community and surviving the backlash. “Take it out of the community and make it an MNC and there is no fear of retribution,” he quips while reinforcing that maintaining local relationships begins with data going back to the seller. “Such a decentralized local digital marketplace model can potentially create companies valued at $1 million or even $100 million across cities,” he adds.  

What is confounding though is ONDC chief business officer Shireesh Joshi’s view that such a human intensive business may need to shed these constraints to scale. Which makes us wonder whether officials within the ONDC actually see eye to eye and what Joshi thinks of his boss’s idea of having a capitalist in every town – one that eSamudaay had christened Circle Promoter when they began the local commerce and digitization initiative in January 2021 from Udupi. 

However, Koshi is quite clear that the ONDC would require multiple entities coming together to transact among themselves. “There is no central platform. In a normal conventional launch of a bank, or a stock exchange or anything, there would be a central platform which is 80% in your control. Whereas in a network, you are creating a language and grammar to allow organic growth where more and more people talk to each other and transact,” he says. 

To make sure it happens organically, ONDC took up the most challenging last mile which is food and grocery. The idea was to start small in five cities, bring some sellers, some buying platforms and logistics together to transact in a controlled environment. Once this number grows, we will have one capitalist in every town (managing the digital economy). 

Of course, this ties in pretty organically with what Prime Minister Narendra Modi has articulated on several occasions – become job creators instead of job seekers and become digital entrepreneurs helping small businesses. 

Maybe, there’s still an iota of conventional American corporate thought in what is essentially a Made-in-India solution to grow the economy. 

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