Government’s open network revolution: ONDC spreads its wings to 236 cities

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In a significant development for India’s e-commerce landscape, the Open Network for Digital Commerce (ONDC), the government’s open e-commerce network, has expanded its operations to 236 cities across the country, a senior official told Reuters on Thursday. 

This expansion comes with the addition of over 36,000 merchants, enabling small businesses and retailers to access the processes and technologies typically dominated by major e-commerce platforms like Amazon and Walmart.

Launched last year, ONDC operates as a non-profit organization dedicated to fostering inclusivity and accessibility in e-commerce for both consumers and small merchants. By displaying products and services from all participating e-commerce platforms in search results across various apps on its network, ONDC is helping level the playing field and promote fair competition.

T. Koshy, CEO of ONDC, has emphasized the network’s commitment to supporting small merchants and making e-commerce more accessible. “ONDC is handholding small merchants while aiming to make e-commerce more inclusive and accessible for consumers,” Reuters quotes Koshy.

He also revealed that the network is witnessing a steady increase in transactions, indicating its growing popularity among users.

ONDC: Redefining the E-commerce Game

The Indian government has expressed concerns about existing e-commerce platforms being tightly controlled, which limits the participation of many small players. ONDC is seen as a solution to this issue, expected to increase competition in the market and foster innovation among startups.

Taking the initiative a step further, ONDC is currently in talks with cab operators to expand its services to at least four cities. After successfully launching mobility operations in two cities in South India, over 55,000 taxi cab owners have already joined the network. Consumers are also benefiting from this move, with approximately 35,000 rides being booked through the platform daily.

The introduction of ONDC has enabled cab owners to provide services while reducing the hefty commissions paid to other platforms, allowing them to offer more affordable rates to passengers. Reuters quoted Shaikh Salauddin, head of the Telangana Four-Wheeler Drivers Association and a taxi driver, as saying that the ONDC initiative benefits both consumers and small players.

With ambitious goals in mind, ONDC aims to raise e-commerce penetration in India from the current 8 percent to 25 percent of consumer purchases within the next two years. This transformation is expected to have a significant impact, given India’s population of 1.4 billion people.

Adding to the network’s capabilities, the state-run Indian postal service, with a vast network of nearly 160,000 post offices, will also join ONDC. This collaboration will enable the provision of logistics services to small traders across the country, further strengthening the support system for small businesses.

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