One Digital Transaction At A Time
Give us a sense of how ONDC has disrupted the ecommerce space?
UPI started seven years ago. The idea was to completely disrupt the financial transaction space, which is now exploding after a couple of years of the foundation getting ready. ONDC is like UPI; we started being broadly available to the public in Bangalore in the last calendar year; in fact, it started pushing this year from January onwards. Population scale business practices do not happen overnight. It takes time. It means people getting familiar, changing the habits and practices of both the buyers and sellers. One of the biggest challenges with regard to ONDC is that it's about commerce. UPI was about money, one SKU, it is purely digital, managed through banks and fintech companies which are anyway digitally sophisticated. Here we are talking about in addition to a transaction being consummated and a digital contract being signed, there is delivery of physical goods, and the participating entities are very diverse from kirana stores on one side to large corporations like Unilever, Pepsi, Coca-Cola on the other. In January, we had about 800 merchants, today there are over 2,00,000 merchants and they're growing. By next year, this time, I hope to add 2,00,000 more. We are getting significant adoption from large entities like ITC. Similarly, you can also see that we have almost 1,00,000 taxi drivers and auto drivers who are already on-board more than 2,000 FPOs.
In terms of participation, which is the biggest sector on ONDC?
Look at any business transaction, one side is money. The buyer paying the money to the seller. That's what UPI did. The other side is seller giving goods or services. Irrespective of what you are buying, money is money. Whereas when it comes to selling, it could be products, it could be services, it could be B2B, it could be B2C. That’s why if you look at ecommerce platforms, some are for consumer goods, some for food, because it is practically impossible for them to handle everything. Now what we did is we took the most difficult part, which is grocery and food, and we thought that if we could attempt and learn the whole requirement in these two segments, we will be better off in the others. We immediately started mobility. We have about 1,00,000 taxi drivers already registered, doing almost an average of 1,00,000 transactions a day. Grocery had one of the biggest challenges probably, where there was a restriction on online transaction by small merchants unless they have a GST, and the government made a rule change this month onwards where that restriction is gone. We started enabling practically every domain like electronics, fashion, beauty and personal. In one month of being live in B2B segment we saw 30,000 transactions. We have to convince different enterprises in this business that this is a way that ecommerce is changing. Some people are early adopters, some are late.
What kind of challenges are you facing in bringing merchants to this platform?
The benefit is that everyone's participation is possible. Big people, small people, everyone can come to digital commerce. The challenge is on two counts. One is the established players. The second is educating people on what ONDC is and does as well as teaching them how to use it effectively for them to truly gauge the benefits of ONDC. We are also having joint campaigns with the ministries.
What is the leverage that ONDC, once implemented, can unleash on the economic front? What are the numbers that you have estimated?
The key thing we must remember is that you are now suddenly giving opportunity to a large cross-section of business enterprises to enhance their market within India and eventually internationally. Let us say North India, about which people in South India don't know.Now when it is easily available, it triggers business transactions and bridges the gap. Now there will be acceptance and adoptions, and probably even international interest because various building blocks like seller interface, logistics, warehousing, certification have all become digitally relevant.
What is your vision for ONDC? Where do you want to take it?
I will make one vision -- in four or five years, every business in Hindustan which has a product or service can catalogue it. Having catalogue means a larger number of people can be interested. Every businessman can have their catalogue digitally visible on the ONDC network. They can find out about an order, enter into a contract and deliver. A buying application will come, which will help to buy relevant goods for every citizen. We expect potential participation from all businesses and all buyers in this network, unlike today when it is very limited. It does not mean that commerce will be 100 per cent digital. The level of digital commerce will multiply four-fold. In the next 5-7 years, about 20-30 per cent of all transactions will be digital. We are also getting a lot of international investors to see first-level participation in India and possibly evaluating how this can be taken global. I would say that our approach is to make sure ONDC is relevant and helpful for the Indian population, Indian merchants, and that having demonstrated its potential in such a large market, it will become a natural pull, you do not have to push for it.
