ONDC Growth and Impact on E-commerce in India

Is the government-launched ONDC (Open Network for Digital Commerce) really taking off? Is ONDC growth actually happening? Are the numbers meeting expectations? Let’s find out in this detailed report!

Seller Side Expansion

Till now according to the official website of ONDC more than 5.52 lakh sellers have onboarded on ONDC and its collaboration with startups to ensure greater access to market.

The aim of ONDC was to democratize and make digital commerce accessible to smaller players. In January 2023 there were only 600 sellers on ONDC , so clearly the growth is exponential ! It is also expected that in the coming year the growth will multiply rapidly and it will build its momentum. Out of the total number of sellers onboarded on ONDC till now 70% are small and medium sellers. “ONDC may see 50 million transactions a day by year-end.” says T Koshy, MD & CEO.

But still the question arises in everyone’s mind, is ONDC growth only on sellers side or buyers are also as much engaged ? Let’s check out.

Is the government-launched ONDC (Open Network for Digital Commerce) really taking off? Is ONDC growth actually happening? Are the numbers meeting expectations? Let’s find out in this detailed report!

Seller Side Expansion

Till now according to the official website of ONDC more than 5.52 lakh sellers have onboarded on ONDC and its collaboration with startups to ensure greater access to market.

The aim of ONDC was to democratize and make digital commerce accessible to smaller players. In January 2023 there were only 600 sellers on ONDC , so clearly the growth is exponential ! It is also expected that in the coming year the growth will multiply rapidly and it will build its momentum. Out of the total number of sellers onboarded on ONDC till now 70% are small and medium sellers. “ONDC may see 50 million transactions a day by year-end.” says T Koshy, MD & CEO.

But still the question arises in everyone’s mind, is ONDC growth only on sellers side or buyers are also as much engaged ? Let’s check out.

[Source: ONDC website]

Buyer side expansion

The orders on ONDC have touched the skies in the past few months, increasing from over 600,000 in September 2023 to 7.7 million in march and climbing to 8.9 million across retail and ride hailing segments in May 2024. This means a 23 percent month on month increase in total transaction volume. The increase in the number of orders reflects the expanding buyer/ consumer interest as well trust in ONDC.

In February, ONDC (Open Network for Digital Commerce) recorded 7.5 million transactions. Of these, 3.8 million were ride-hailing bookings through the Namma Yatri platform, while the remaining 3.7 million were retail purchases. This marks a significant shift from early 2023, when retail purchases only made up 5-10% of transactions, with the mobility category dominating at 90-95%. This growth in retail transactions highlights ONDC's expanding influence in the digital commerce space.

[Source: ONDC website]

Buyer side expansion

The orders on ONDC have touched the skies in the past few months, increasing from over 600,000 in September 2023 to 7.7 million in march and climbing to 8.9 million across retail and ride hailing segments in May 2024. This means a 23 percent month on month increase in total transaction volume. The increase in the number of orders reflects the expanding buyer/ consumer interest as well trust in ONDC.

In February, ONDC (Open Network for Digital Commerce) recorded 7.5 million transactions. Of these, 3.8 million were ride-hailing bookings through the Namma Yatri platform, while the remaining 3.7 million were retail purchases. This marks a significant shift from early 2023, when retail purchases only made up 5-10% of transactions, with the mobility category dominating at 90-95%. This growth in retail transactions highlights ONDC's expanding influence in the digital commerce space.

[Source: ONDC website]

Geographical expansion

In April of 2022 ONDC started its pilot only in 5 cities: New Delhi, Bengaluru, Bhopal, Shillong and Coimbatore. In April, Bengaluru based Woolly Farms received an order from buyer application Paytm. This was the first transaction on ONDC. But now in June 2024 , there are more than 600 cities in which ONDC is operational. ONDC is also planning to double down on tier 2 and tier 3 geographies.

Partnerships
Over 125 key stakeholders including high growth business and startups like EaseMyTrip, OfBusiness, Winzo, Livspace, GlobalBees, Pristyn Care, Cars24, Physics Wallah, PolicyBazaar, and Zerodha, signed a Letter of Intent (LoI). This demonstrates the high potential of ONDC and enthusiasm of leading startups to collaborate with ONDC.
Service providers like PolicyBazaar, EaseMyTrip, and WinZO which have a huge user base have also onboarded on ONDC. This collaboration underscores ONDC's growing influence in India's digital commerce landscape. It is also in the news that flipkart is planning to enter the food and beverages (F&B) category on the government-backed Open Network for Digital Commerce (ONDC) soon.People can also order food and beverages on ONDC through Ola app. Along with that, PhonePe's local commerce app 'Pincode' is also live on the ONDC network as a buyer app.
“Collaboration is key for creating a healthy startup ecosystem. By integrating ONDC into the startup ecosystem, we enable a seamless connection between the businesses and customers.” said Badrinath Mishra, the Vice President of Expansion, ONDC.

Network Participants

According to the ONDC website, there are 3 types of network participants, Live on the Network , Advance Stage of Development and Initiated Integration . Those who are Live on the Network are actively operating and transacting on the ONDC platform. Participants in the Advance Stage of Development are nearly ready to go live, with most setup and testing completed. Finally, those who have Initiated Integration are at the beginning stages of connecting to the ONDC platform, with initial setup underway. According to the latest data on ONDC website:

[Source: ONDC website]

Geographical expansion

In April of 2022 ONDC started its pilot only in 5 cities: New Delhi, Bengaluru, Bhopal, Shillong and Coimbatore. In April, Bengaluru based Woolly Farms received an order from buyer application Paytm. This was the first transaction on ONDC. But now in June 2024 , there are more than 600 cities in which ONDC is operational. ONDC is also planning to double down on tier 2 and tier 3 geographies.

Partnerships
Over 125 key stakeholders including high growth business and startups like EaseMyTrip, OfBusiness, Winzo, Livspace, GlobalBees, Pristyn Care, Cars24, Physics Wallah, PolicyBazaar, and Zerodha, signed a Letter of Intent (LoI). This demonstrates the high potential of ONDC and enthusiasm of leading startups to collaborate with ONDC.
Service providers like PolicyBazaar, EaseMyTrip, and WinZO which have a huge user base have also onboarded on ONDC. This collaboration underscores ONDC's growing influence in India's digital commerce landscape. It is also in the news that flipkart is planning to enter the food and beverages (F&B) category on the government-backed Open Network for Digital Commerce (ONDC) soon.People can also order food and beverages on ONDC through Ola app. Along with that, PhonePe's local commerce app 'Pincode' is also live on the ONDC network as a buyer app.
“Collaboration is key for creating a healthy startup ecosystem. By integrating ONDC into the startup ecosystem, we enable a seamless connection between the businesses and customers.” said Badrinath Mishra, the Vice President of Expansion, ONDC.

Network Participants

According to the ONDC website, there are 3 types of network participants, Live on the Network , Advance Stage of Development and Initiated Integration . Those who are Live on the Network are actively operating and transacting on the ONDC platform. Participants in the Advance Stage of Development are nearly ready to go live, with most setup and testing completed. Finally, those who have Initiated Integration are at the beginning stages of connecting to the ONDC platform, with initial setup underway. According to the latest data on ONDC website:

In the ‘ Live on the Network’ Participants, 61.3% are Seller Network Participants , 16% are Buyer Network Participants, 7.6% are both Seller and Buyer Network Participants and 15.1% are Logistic Service Providers.

Ecosystem Participants

The 4 main ecosystem participants include Technology Service Provider (TSP) , Reconciliation Service Providers (RSP), Online Dispute Resolution Service Providers (ODR) and Network Participant Account Providers. Technology Service Providers (TSP) offer tech solutions to connect your business to the ONDC network, ensuring smooth integration and operation. Reconciliation Service Providers (RSP) handle financial settlements and ensure accurate payment processes, making sure all transactions are correctly accounted for. Online Dispute Resolution Service Providers (ODR) manage and resolve any disputes or issues that arise online, ensuring smooth and fair resolutions. Network Participant Account Providers facilitate account management for businesses participating in the ONDC network, helping to streamline operations and maintain efficient participation, IDFC FIRST Bank, Yes Bank, Axis Bank, HSBC Bank are among the Network Participant Account Providers.

Future Prospects

ONDC is set to explode in growth, aiming to increase monthly transactions by 10x this year! With Amazon processing about 1.6 million orders daily, ONDC is on track to rival the e-commerce giant within the next year. This meteoric rise is a game-changer in the digital commerce world—don’t miss out on this incredible transformation. Be a part of ONDC with SellerSetu as your bridge. At SellerSetu, we provide you with a quick, affordable, and seamless way to go live on ONDC and unlock endless opportunities to sell your products online. Fill out the form below to book a demo with us.

Ecosystem Participants

The 4 main ecosystem participants include Technology Service Provider (TSP) , Reconciliation Service Providers (RSP), Online Dispute Resolution Service Providers (ODR) and Network Participant Account Providers. Technology Service Providers (TSP) offer tech solutions to connect your business to the ONDC network, ensuring smooth integration and operation. Reconciliation Service Providers (RSP) handle financial settlements and ensure accurate payment processes, making sure all transactions are correctly accounted for. Online Dispute Resolution Service Providers (ODR) manage and resolve any disputes or issues that arise online, ensuring smooth and fair resolutions. Network Participant Account Providers facilitate account management for businesses participating in the ONDC network, helping to streamline operations and maintain efficient participation, IDFC FIRST Bank, Yes Bank, Axis Bank, HSBC Bank are among the Network Participant Account Providers.

Future Prospects

ONDC is set to explode in growth, aiming to increase monthly transactions by 10x this year! With Amazon processing about 1.6 million orders daily, ONDC is on track to rival the e-commerce giant within the next year. This meteoric rise is a game-changer in the digital commerce world—don’t miss out on this incredible transformation. Be a part of ONDC with SellerSetu as your bridge. At SellerSetu, we provide you with a quick, affordable, and seamless way to go live on ONDC and unlock endless opportunities to sell your products online. Fill out the form below to book a demo with us.

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