Open Network for Digital Commerce


The Open Network for Digital Commerce (ONDC), a private non-profit ecommerce platform, has garnered a significant number of users and daily orders of consumer goods and food deliveries since its launch in 2022.

However, ONDC has a long way to go to match the technological and service capabilities of industry heavyweights, such as Amazon, Flipkart, Zomato, Swiggy, and Big Basket. Nonetheless, as the disruptive platform gains critical mass with more vendors and consumers signing up, it can trigger a price war in the Indian ecommerce market, which is set to cross the $100 billion milestone by 2024*, according to GlobalData.

Bobby Verghese, Consumer Analyst at GlobalData, comments: “After the BHIM unified payment interface and the RuPay credit card, the ONDC is the latest initiative of the Indian Government to build a digital economy. The government launched the ONDC as an open online sales platform for large, medium, and small-scale businesses. It operates as a website or application that can be integrated into other online shopping or food-ordering apps, such as Paytm, PhonePe, Magicpin, and Meesho. As it operates as a direct-to-consumer sales platform for manufacturers, traders, and foodservice operators, the ONDC can accelerate the digitalization of India’s huge unorganized sector. Since the beta version of the website was launched in September 2022, the ONDC has been gradually expanding its network of vendors and users.”

Francis Gabriel Godad, Consumer Business Development Manager at GlobalData India, notes: “In its current state, ONDC has a long way to go before it takes on the heavyweights in online shopping, Amazon and Flipkart; food aggregation, Zomato, and Swiggy; and e-grocers, Big Basket and Blinkit. These walled garden operators have developed a remarkable technological ecosystem, a large delivery-runner network, and an efficient customer service system. They operate as a last-mile delivery service between vendors and consumers, unlike ONDC, which merely operates as an open online market where vendors directly service customers.

“Contrarily, as ONDC operates an open market without charging any third-party service fees, both vendors and consumers can realize considerable cost savings on their transactions. As the platform’s user base acquires critical mass, it can serve as a benchmark for price discovery for both vendors and consumers, instead of allowing the leading online retailers and food aggregators to dictate prices. ONDC can thereby become a disruptor in the Indian online food ordering and delivery market, where foodservice operators and food aggregators are tussling over service charges.”

Verghese adds: “ONDC can also provide legislators with a benchmark index of ecommerce transactions to frame appropriate laws and taxes for the industry. Over time, it can accumulate a database of shopper insights, which the government can potentially open up to vendors to aid them in formulating new sales strategies. Currently, Indian online retailers and food aggregators closely guard their consumer insights database.”

Godad concludes: “The Indian Government’s Digital India initiative and the COVID-19 pandemic gave a shot in the arm to the country’s nascent ecommerce industry. GlobalData projects the Indian online retail market will record double-digit growth through 2027*, and the food takeaway market is forecast to expand at a compounded annual growth rate (CAGR) of about 8% over 2022–27**. The ONDC can play a major role in these adjacent spaces, provided it expands its user base further. Much depends on how well the platform can deliver a user-friendly interface, timely order execution, swift user complaint redressal, and overall vendor and customer satisfaction.”

* GlobalData Retail Intelligence Center ­– Market Analyzers, accessed in May 2023.

* GlobalData Foodservice Intelligence Center ­– Market Analyzers, accessed in May 2023.


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