ONDC has democratised ecommerce, expect hockey stick growth: CCI member Anil Agrawal
At TechSparks Bengaluru 2024, Anil Agrawal, who served on the advisory board of ONDC, said sellers on the network have the potential to tap UPI users.
By establishing the Open Network for Digital Commerce (ONDC), India is ensuring that smaller ecommerce companies have a fair chance to compete against larger players, said Anil Agrawal, Member of the Competition Commission of India (CCI).
Commenting on the fees charged and money spent by users and retailers on big tech platforms such as Google, Amazon, and Meta, Agrawal said that while the commission is investigating these complaints, ONDC—an open ecommerce network connecting shoppers, platforms, and retailers—is helping level the playing field.
“As a country, what we have done is to look at these abusive practices of these dominant players [and] we've gone much beyond the legal remedies with ONDC,” he said during a fireside chat with Shradha Sharma, Founder and CEO, YourStory, at TechSparks Bengaluru 2024.
The idea behind ONDC is to harness India’s innovation capabilities and democratise the ecommerce ecosystem, Agrawal explained. The network achieves this by unbundling the four key aspects of an ecommerce transaction: the buyer, the seller, payments, and logistics.
“When you unbundle them and make them interoperable, like HTTP or SMTP protocols... similarly, we created ONDC based on Beckn protocol... these four separated entities can talk to each other and do transactions. This is fundamentally re-organising ecommerce,” Agrawal said.
Beckn protocol is an open and interoperable protocol for decentralised digital ecommerce. It can be extended to sector-specific applications like mobility and has been used for building the Namma Yatri app.
While the pilot phase of ONDC started in April 2022, the network went mainstream in January 2023, registering 1,281 transactions. In August 2024, it recorded 12.5 million monthly transactions.
While ONDC may not be seeing a lot of traffic from big players yet, Agrawal noted it is enabling a lot of smaller sellers.
“I think ONDC’s potential is unlimited. ONDC is at the critical mass, and I see that this is going to rise exponentially onwards,” he said, adding that anyone paying through UPI is a potential customer for sellers on ONDC as the network has onboarded many payment wallets.
ONDC is an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT), the Ministry of Commerce. Before joining CCI, Agrawal served on the advisory council of ONDC at DPIIT.
Edited by Kanishk Singh