2 Lakh Transactions, More Sellers: ONDC CEO T Koshy On The Biggest Challenges And Future Plans For The Network

For the past year, the government-backed Open Network for Digital Commerce (ONDC) has made headlines for its initiative to create a level playing field for various MSME businesses on e-commerce platforms. 

At a time when certain names have market dominance over sectors ranging from food delivery to electronics appliances sale, ONDC aims to establish a more democratic set-up in the e-commerce industry.  

ONDC is an initiative to promote open networks for e-commerce. ONDC is based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform. ONDC aims to go beyond the platform-centric digital commerce model where the buyer and seller have to use the same platform or application for transactions.

The network aims to reach a target of 2,00,000 transactions per day by the end of 2023. Currently, nearly 50,000 retail merchants carry out around 15,000-20,000 daily transactions on the platform, found an equity research report by ICICI Securities. The report also suggests that the mobility sector is responsible for an additional 60,000 transactions per day. However, the network is aiming for 1,00,000 daily transactions from the retail sector and the rest from the mobility space.

 ONDC is currently present in around 240 cities. It plans to increase eCommerce penetration from 8% to 25% within two years.

T Koshy, managing director and CEO of ONDC told The Core that there are plans to make the network more customer-centric alongside bringing more sellers on board. He also spoke of the challenges that ONDC needs to overcome to achieve the goal. 

Koshy said, "We have introduced ONDC Academy, where sellers can access interactive videos and learning materials related to digital commerce offering programmes in multiple Indian languages. This way, even sellers from the remotest corner of the country can sell his/her items online. To make the process even smoother, we have seller applications like Paytm, delivery applications like Delivery, Shiprocket, etc to ensure smooth delivery to customers, and fintech companies like SpiceMoney, that work with the rural population. People need to understand that this is not a platform, rather it is a network connecting several other platforms." 

 

Here are edited excerpts from the interview: 

 

ONDC has said that it aims to help the MSME sector for better growth and customer reach. What are the exact criteria that need to be fulfilled either as a service provider or seller to be on the network?

There is no set of specific eligibility criteria for the sellers, but the seller needs to have the basic infrastructure to be on the ONDC and only after that they will be able to do it. To be a part of the network, the sellers need to have a proper IT system in place. In case, the business is too small and they don't have an IT system in place, they need to go to one of the aggregators and the aggregators will tell them to have the catalogue in place and help accordingly. 

To be a part of the ONDC network, the sellers need to have a digital catalogue, they should have the ability to create digital invoices and the aggregators will teach them how to proceed with all these. The sellers need to have the digital catalogue to receive the order. 

 

Can you please explain the redressal process for the customers? 

Whenever customers have complaints, they need to go to the buyer applications. ONDC sells through buyer applications and keeps track of them. There are places where people have misunderstandings, but there is nothing yet in dispute, everything gets resolved. For example, if the buyer has bought something through Paytm App, in case of any dispute, the buyer can contact the customer support of Paytm.

Right now, we have Paytm as our buyer application. Gradually we will have more such buyer applications.

 

How do you plan to achieve the target of 2 lakh transactions daily on ONDC, do you want to implement any change in the existing infrastructure? 

We don't need to create any infrastructure. Our applications for the respective task will take care of the same. For example, Paytm will increase the repository for buyer applications, and more applications and seller applications will eventually come. We are not building any platforms, it is all there, we are just making the network. We are just the choreographer who is bringing different applications like Paytm, SpiceMoney, etc in place to set up a network. Accordingly, seller applications and buyer applications will come as per our specifications. 

We are just creating a language and its grammar with a supervision system over the other existing applications. 

 

ONDC doesn't have a delivery system of its own, how do you plan to ensure fast delivery to the customers that matter? 

If the sellers already have a delivery system in place, then they will offer customers the delivery also. Otherwise, the ONDC network has Dunzo, Delhivery, Shadofax, Shiprocket, Ekart, etc as their delivery partner. So they will take care of the logistics part. 

If the sellers don't have logistic capabilities, they can buy the logistics part from the respective delivery partners on ONDC like Dunzo and they will work in coordination with each other to ensure the customers get the delivery.

 

What do you think is the biggest challenge ONDC needs to overcome to make the e-commerce ecosystem more democratised? 

Two major challenges we need to overcome. Firstly, we need to educate sellers and convince them to come and be a part of the ONDC network. Secondly, the challenge is to bring more customers to the ONDC network and convince them to use it for buying and ordering stuff. 

Currently, the majority of the customers are already using some or the other e-commerce platforms in respective domains and each sector has a monopoly of some apps. At such a time, when the customers are already used to something, the challenge lies in bringing them onto the network. 

 

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