The India story
As the second most populous country in the world, India stands on the precipice of a digital revolution poised to transform its economic landscape. With over 1.4 billion citizens, India presents a vast market teeming with potential. The burgeoning middle class, fueled by increasing disposable income and spending power, is eager to embrace new technologies that enhance convenience and improve quality of life. Coupled with a staggering rise in internet penetration — expected to reach over 900 million users by 2025 — the foundation for a vibrant digital economy is firmly in place.
The Growth of E-Commerce
Amidst this backdrop, e-commerce is emerging as a powerful force, reshaping consumer behavior and creating unprecedented opportunities for businesses. India’s e-commerce sector is experiencing exponential growth, with projections estimating it will reach INR 4,400 billion by 2024, and further balloon to INR 7,000 billion by 2029.
This surge is driven in large part by the country’s middle class, whose spending habits are shifting from traditional retail to online platforms. Notably, over 60% of online orders now originate from tier-two cities and smaller towns, highlighting the democratisation of digital commerce beyond the major metropolitan hubs.
The Magic of Digital Payments
Integral to this e-commerce boom is the proliferation of digital payments. The widespread adoption of Unified Payments Interface (UPI) and other digital payment solutions has made transactions seamless and secure, accelerating the shift from cash to digital.
With 602 Banks enabling UPI transactions, reaching a staggering INR 200 trillion with 131 Billion plus transactions in FY 2024 and the user base surpassing 800 million, India is fast becoming a cashless society. This is when India has around 330 million unique users, over 70 million merchants, using 256 million QR codes. Imagine the volume and value when UPI population penetration going up to 50% which may happen in the coming years.
This evolution is not just a testament to technological advancement but also an enabler of financial inclusion, empowering individuals across the socioeconomic spectrum to participate in the digital economy
The Birth of ONDC
However, these developments are merely stepping stones to something even more transformative: the Open Network for Digital Commerce (ONDC). As India’s digital infrastructure matures, ONDC emerges as a game-changer, offering a platform that integrates sellers and buyers into a unified digital marketplace.
The Open Network for Digital Commerce (ONDC) is an initiative launched by the Government of India on April 29, 2022, aiming to democratize and decentralize the digital commerce landscape.
The initiative seeks to empower micro, small, and medium enterprises (MSMEs) by giving them access to a larger customer base and the tools they need to compete with larger e-commerce giants.
The Difference between ONDC and traditional E-commerce platform
Consider ONDC is like a big, open playground where everyone can play together, no matter what team they’re on. It allows different online stores or market places to connect and share their products, so shoppers have more choices and can find the best deals.
On the other hand, traditional e-commerce players Amazon or Flipkart are like a giant mall where all the shops are part of the same building. When you shop on Amazon, you’re mostly buying from stores that are inside this mall, and Amazon makes the rules. Sometimes, smaller shops find it hard to compete because Amazon also sells its own products.
So, while Amazon is a big, powerful mall, ONDC is a friendly open market where all kinds of shops can join and reach customers, giving people more options to buy what they want.
ONDC: What Shoppers Stand to Gain
Merchants can sell their products on various e-commerce sites that are part of the ONDC network, giving them access to a broader audience without being confined to a single platform. This approach helps small businesses gain more visibility and reduces dependency on major e-commerce giants.
ONDC also controls the listing fees typically charged by larger marketplaces. By reducing costs and standardizing processes like inventory management, ONDC helps small businesses operate more efficiently and keep more of their profits.
ONDC Today
ONDC has recorded 68 million transactions since its inception and now includes 65 seller applications, 12 logistics providers, and 22 buyer applications. Over 5.35 lakh sellers have joined the platform, with 85% being small businesses.
In April 2024 alone, ONDC facilitated 3.6 million transactions. The network has expanded to over 1,000 cities, with more than 765 cities consistently achieving over 100 monthly orders for three consecutive months.
The government aims to increase e-commerce penetration in the country to 25% within the next few years, targeting a gross merchandise value of $48 billion.
ONDC is India’s Way forward
India is on the cusp of a digital transformation, and the Open Network for Digital Commerce (ONDC) stands at the forefront of this change, poised to revolutionize the e-commerce landscape.
By breaking down barriers and fostering an open marketplace, ONDC offers small businesses the chance to compete on an equal footing with large e-commerce giants, allowing them to tap into the country’s expanding digital economy.
For the millions of small entrepreneurs in India, ONDC is not just a new way to do business—it’s a game changer that promises to redefine their future. As ONDC continues to expand its reach and influence, it has the potential to inspire similar models globally, showcasing how a truly inclusive and equitable e-commerce ecosystem can unlock new opportunities and drive sustainable growth.
The Indian e-commerce story is just beginning, and with ONDC leading the charge, it is set to be a story of empowerment, innovation, and transformation that resonates around the world.
DAAS Labs : Data And Analytics services is proud to be a part of ONDC in shaping the e-commerce journey of India. Visit DAAS LABS or Connect with us to know more about us.
Notes:
All statistics cited are derived from public information available in various trusted newspaper articles and relevant government websites.
