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ONDC: Levelling the Playing Field

  •  3 min read
  • 0
  • 18 Nov 2024
ONDC: Levelling the Playing Field

Imagine finding your neighbourhood hardware store on Meesho. You have ONDC to thank for that. Any business, big or small can register on ONDC as a vendor. Why should they register? Because ONDC’s registry is open to other bigger platforms like Meesho, Paytm, or any other app. What does that mean? That means when someone goes on these apps looking for something, their search can lead them to the smallest of vendors around them due to their ONDC registry.

So vendors who register on ONDC are hosted there. And ONDC then shows their products on third-party apps. These third-party apps are network participants.

And here’s the twist: there’s no “middleman” setting the rules. That’s ONDC, India’s answer to rethinking e-commerce.

Behind this massive vision is none other than Nandan Nilekani, the same mind that reshaped digital payments in India with UPI. If UPI was about putting cashless transactions in everyone’s pocket, ONDC is about giving power back to local sellers and choice back to the shopper. Small vendors aren’t just surviving on this platform; they’re thriving without having to play by the big guy’s rules.

Now, throw out the idea of jumping between different apps to find the best deal, ONDC wants to bring them all together, like one giant digital “sabzi mandi.”

The impact? More access, better prices, and a level playing field where small and big sellers compete on equal terms.

And the momentum is building fast: ONDC is now in 800+ cities, with millions of orders rolling in every month. Major players like PhonePe, EaseMyTrip, and Zerodha are backing it, helping turn this platform into a powerhouse by becoming network partners.

What’s in it for the buyer? More choices and direct access to sellers, without the big platform fees hiking up prices. Sellers, in turn, get to handle orders, payments, and customer data directly, with no interference. ONDC’s payment system is built right in, so transactions are smooth, secure, and hassle-free.

But ONDC isn’t just thinking about today. The big picture? A projected leap from a $70 billion e-commerce market in FY22 to a whopping $340 billion by FY30.

McKinsey predicts that ONDC could expand the digital consumer base from 190 million to 500 million by 2030.

It’s a game-changer for MSMEs and farmers too, boosting their incomes by up to 35% and bringing them into a thriving digital ecosystem that would’ve been impossible just a decade ago. ONDC is shaping up to be the sleeping giant of e-commerce, ready to wake the industry with a model no one saw coming. It’s breaking down barriers, pulling in new consumers, and setting the stage for an e-commerce revolution right under our noses.

Sources:

ONDC
Economic Times
Daffodil

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.

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