With government-backed ONDC (Open Network for Digital Commerce) completing a full year of operations on December 31, exchange4media reached out to advertising industry veterans for a sense of how the platform has performed, and how they see it impacting the retail media space in India.

We reached out to ONDC for comments but didn’t receive a response till the time of publishing.

While the platform has signed on everyone from Coca-Cola and Nestle to Domino’s, what sets it apart is its focus on catering to Bharat and small, local sellers and buyers, leading to a surge in e-commerce spending.

According to a report by Redseer Strategy Consultants released earlier in December, DPIs (digital public infrastructure) likeONDCwill play a crucial role in democratising this growth with ONDC potentially generating $250-300 billion in GMV (gross merchandise value) by 2030. It should be noted that according to media reports, ONDC generated 12 lakh orders during the Diwali week (between November 6 to November 13), a not-too-shabby feat for a platform that is less than a year old.

“While ONDC has experienced a significant surge in user adoption, onboarding thousands of sellers, advertising is an area that ONDC at a network level and buyer apps are progressively decoding. ONDC has the potential to become a substantial contributor to overall retail media spending in India. Notably, numerous large brands have already joined the network, indicating that there will be a surge in media investments as ad inventory becomes available on the platform,” observes Ritika Taneja, Head of E-Commerce, GroupM India.

According to her, ONDC stands out due to its unique attributes. “Operating as an open network, it facilitates direct connections between buyers and sellers without the limitations of traditional e-commerce platforms. This inclusivity breaks barriers for sellers of all sizes, fostering a diverse marketplace.”

Girish Ramachandra, Founder & CEO, Shopalyst believes ONDC is poised to create a level playing field with its network-based model that connects sellers and buyers, with on-network discovery of related services like payments, credit, logistics, etc.

“Even as it completes its first full year, it has made a profound impact on the online commerce ecosystem in India. As a tech enabler in the ecosystem, Shopalyst is seeing thousands of sellers, large and small alike getting discovered on several buyer apps on the ONDC network. Consumers are now able to shop across popular categories like food, grocery, electronics, beauty, personal care, fashion, accessories, mobility and many more at affordable prices,” he says.

Moreover,ONDC's lower transaction fees, compared to dominant platforms, offer potential benefits that could result in more competitive prices for buyers and reduced expenses for sellers.

“Additionally, it empowers buyers by granting them access to a wider range of sellers, affording greater control over their shopping experience,” says Taneja.

Many popular brands are joining the network, and some have already scaled to up to 10K+ daily orders - this surely is the right direction for network economics to kick and scale ONDC exponentially.

“Unlike the vertically integrated platform model that largemarketplacesoperate on, ONDC is a network of independent participants (sellers, buyers, payment and logistics providers etc) who get discovered in the context of a transaction. This approach creates a more open and level playing field for small and big players, thus creating choice and efficiency for consumers,” notes Ramachandran.

Taneja adds that the platform's adherence to open standards also promotes fairness and transparency, ensuring equitable competition among participating platforms. “Ensuring brand safety and protecting customers from potential scams and fraud onONDCwill be a priority, relying on raising awareness.”

And indeed, the network still has a long way to go in terms of the services it offers. An advertising agency head points out that unlike Amazon or Flipkart, which are complete ecosystems in themselves, ONDC is still just a facilitator between consumers and brands. “It doesn't make guarantees of delivery timings, or quality assurances of the product. That is still a caveat emptor. So while it's signing on plenty of brands, it still has a ways to go before it can beat the traditional e-commerce platforms,” they observed.

We shall update you on that journey in 2024.