How ONDC is set to be India's UPI moment for e-commerce
India is attempting several big reforms in the technology sector to allow local businesses thrive amid anti-market practices from Big Tech and according to Shireesh Joshi, Chief Business Officer (CBO) and President, Network Expansion for the Open Network for Digital Commerce (ONDC), the goal is to create population-scale inclusion of e-commerce in the country.
With ONDC, a Unified Payments Interface (UPI)-type initiative of the Ministry of Commerce and Industry to promote open networks, the government is trying to create the largest interoperable open platform in a bid to break e-commerce monopolies and build a more democratised digital marketplace by bringing micro, small, and medium enterprise as well as small traders online.
Currently, only 5-6 per cent of India's retail activity is digital.
There are several limitations and constraints of existing platform based e-commerce that will be solved by unbundling and creating interoperability that will further allow any kind of product or service, whether as B2B or B2C, to be transacted on ONDC," Joshi told IANS in an interview.
One of the immediate outcomes of this unbundling and interoperability is that every seller will have access to every buyer, and vice versa.
"Scale that was limited to a few players will now be available to everyone and help in democratising. E-commerce majors are also in conversation with us for onboarding on ONDC. This is not an anti-anyone initiative," Joshi elaborated.
The democratisation and innovation that will result from ONDC will allow all kinds of players to flourish and "we will need all these multiple models of e-commerce to help achieve the goal of population-scale inclusion," he stressed.
Union Commerce and Industry Minister Piyush Goyal has announced that ONDC will gradually be expanded to more cities in the near future, as it has the potential to connect the entire farm value chain.
The Centre also envisions ONDC as a private sector-led, non-profit company to bring focus on ethical and responsible behaviour while providing for trust, rigorous norms of governance, accountability, and transparency.
According to Joshi, an IIT Kanpur and IIM Bangalore alumnus, for farmers and farmer producer organisations (FPOs), the UPI-type protocol will enable access to a much wider market.
"Your neighbourhood fruit seller might claim that the Apples he sells are from Himachal, or the litchees are from Muzaffarpur. But you may not have a way of being sure. But on ONDC you may be able to buy directly from an orchard in Himachal or UP and be sure," Joshi noted.
Farms and orchards can become brands too and realise better pricing than as commodities through a multi-tier trading and distribution system.
"Famers will be able access all buyers across the country through a single registration and not have to register with multiple organisations," he emphasised.
This network-wide buyer access has other benefits too.
For example, it can help determine the best market prices for his products, say the current prices of Himachal apples in Delhi and Jaipur mandis to help decide what price to quote and which order to accept.
"Such a scale will create providers of various kinds of services -- packing, warehousing, shipping which will enable cost efficient market reach. Products need not be shipped to markets anticipating demand and risk expiring in case it does not materialise, it can be warehoused and shipped on demand instead," Joshi told IANS.
On ONDC, farmers will not only sell but also be able to buy seeds, fertilizers, pesticides, growth regulators, equipment and tools.
The initiative has an agri-focused entity in National Bank for Agriculture and Rural Development (NABARD) as one of its shareholders which has helped it solve technical challenges and engage with several organisations in the agri sector.
According to Joshi, this is not a one-time journey, given the agri sector's complexity and diversity.
"We expect this to be repeated every few months to keep building and adding to the agri solutions stack. At some stage, the ecosystem itself should kick in and ONDC may not have to facilitate after that," Joshi elaborated.
Besides this, they are also engaging with state governments to promote adoption of ONDC for agri e-commerce.
"Haryana and Madhya Pradesh governments have begun mobilising support for this and we expect more to follow. Central initiatives like National Agriculture Market (eNAM), which is a pan-India electronic trading portal, is also in active discussion with us on evolving the best way forward," Joshi informed.
Overall, ONDC will enable lower costs and higher revenues for farmers, enabling more autonomy and benefits for a farmer, said Joshi who has been credited with managing large-scale business operations/strategy in India and China, including Hong Kong, Taiwan and South Asian territories.
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