The Open Network for Digital Commerce (ONDC) has the potential to help brands increase customer reach and product discoverability, while gaining richer insights on customer behaviour, according to a report by Publicis Groupe and Digital India Foundation.
In September, ONDC began beta-testing in Bengaluru for groceries and food and beverages, with expectations of a nationwide rollout sometimes next year.
The report titled, “Decoding ONDC: Perspective for Marketers”, stated that even as the Indian e-commerce sector is growing at a warp speed, only a small portion of internet users in India are currently online shoppers. This is because of factors such as a large portion of the retail sector still not being digitally enabled and limitations of digital commerce in smaller towns and rural markets, it added.
In the long term, ONDC aims to enable more than 20 lakh retailers, with e-commerce covering over 75 per cent of pincodes in India.
“ONDC aims to democratise the e-commerce space and signals a new era in digital commerce in the country. It is expected to enable brands to gain increased consumer reach, enhanced product discoverability and help reduce average cost per sale. It is also expected to offer richer insights on customer behaviour to brands, while unbundling opportunities across industry verticals.,” said Anupriya Acharya CEO, Publicis Groupe, South Asia
The report pointed out that given ONDC’s open architecture, the commissions and overhead costs for transactions are likely to come down. It added that the marketer will be able to gain insights such as demographic data, frequency of purchase, shopping behaviour, category insights, among others, through the platform.
It added that consumer packaged goods brands, for instance, will be able to own end-to-end delivery and service via ONDC, enabling them to increase customer reach and gain insights on fast-selling categories. Brands can also look into indirect participation through marketplace seller nodes, which will require minimal upfront time and efforts. “Brands with substantial physical retail presence can register their retail outlets as distribution hubs on ONDC, thereby, increasing their chances of discovery. Consequently, ONDC will also augment the sales potential of each physical outlet,” the report pointed out.
While it is still in the early stages of its lifecycle, brands need to get their ONDC strategy and approach in place. ”ONDC readiness requires cross-functional capabilities in planning, technology, experience, content, discovery and commerce operations,” Acharya added.
Brands will need to invest in key capabilities such as designing appropriate content strategy to ensure products are listed under relevant categories and highlight key product descriptors. “ONDC brings the focus on hyperlocal commerce. Brands must design logistics and operations structures to ensure availability in the majority of pincodes in their target markets,” it added.