Now, with the Indian government aiming to redefine e-commerce, ONDC emerges as the signal of change, pledging democratization and accessibility for all. But what propels its sudden resurgence, and how does it sculpt the trajectory of India's digital economy? Let's embark on the captivating journey of ONDC.

Presently, only 5% of MSMEs are involved in online sales, with a mere 20% of Indians making online purchases, highlighting significant growth potential. To stimulate this growth, the government introduced the Open Network for Digital Commerce (ONDC).

Recently, numerous major tech players have announced their participation in ONDC. But what motivates them to do so, and how does ONDC address various challenges in India's e-commerce landscape?

Firstly, let's simplify what ONDC is all about. It is an initiative by the Indian government aimed at democratizing and enhancing accessibility to e-commerce for all. Despite India's e-commerce market being estimated at over $100 billion, only 20% of Indians have engaged in online purchases, indicating significant untapped demand. On the supply side, out of approximately 100 million MSMEs in India, only 5-6% are involved in online sales. Just imagine the enormous potential if all these businesses were to venture online. This is precisely the core philosophy behind ONDC – a comprehensive approach poised to revolutionize every aspect of e-commerce in India.

The ONDC pilot commenced in April 2022 and was opened to the public in September of the same year. By early 2023, ONDC was operational in approximately 85 cities, with around 800 merchants onboard, handling around 2000 orders per month. Fast forward to 2024, and the landscape has transformed significantly – ONDC now spans 543 cities, with over 3.3 lakh merchants onboard, facilitating a staggering 90 lakh transactions per month, marking a growth of over 4500 times within just one year.

So, what fueled this remarkable transformation, and what ignited merchants' enthusiasm about ONDC? One pivotal factor is the network effect: as new merchants and customers acquaint themselves with ONDC's benefits, they share their positive experiences with others, triggering a ripple effect. Consequently, major companies are beginning to recognize the value proposition of ONDC and are eagerly joining the platform. The advantages of an open network like ONDC over marketplace monopolies are apparent, including low commission rates and enhanced visibility.

To elaborate, let's consider the food delivery sector in India. Currently, marketplaces impose substantial commissions ranging from 25-33% on restaurants. In contrast, ONDC operates commission-free, although seller apps may levy a nominal 5% fee to cover expenses. Moreover, unlike platforms like Amazon and Flipkart, where sales are restricted to their respective apps, ONDC offers a broader network, enabling merchants to reach anyone connected to the platform, thereby enhancing brand visibility. This inclusivity fosters opportunities for brands of all scales and sizes to thrive in India's flourishing e-commerce landscape.