Shireesh Joshi, Chief Business Officer of Open Network for Digital Commerce (ONDC), said that the organisation is working with partners to get the network ready for launch and expects that by the middle of next month real customers will be able to use it.
Currently, ONDC is running pilots in 21 cities and is holding conversations with various industry associations, venture capitalists to onboard more companies on the network. In a conversation with BusinessLine, Joshi explains the benefits of joining ONDC and the impact it will soon create. Excerpts:
Snapdeal recently announced joining ONDC. Can you tell how Snapdeal or any other platform benefit from joining ONDC?
Till now, anybody who built a platform has had to onboard both buyers and sellers, and could only benefit from the transaction that takes place between their own sellers and buyers.
Buyers on the platform cannot access sellers outside and sellers on the platform cannot access buyers outside the platform. Further, acquiring buyers and sellers are expensive tasks, especially when a single organisation does it.
The way ONDC would benefit any platform, whether it’s a large or small application, is that one platform’s buyers can buy from all sellers in the ONDC network and sellers can sell to all buyers in the network.
As a result, ONDC creates a business advantage by enabling platforms to leverage their assets for a much greater part of the transaction.
Will all platforms get access to what customers are searching on ONDC, as they would get if customers searched directly on a platform like Snapdeal?
Customer data is only shared with the platform when a buyer has confirmed that they are buying the product from them. This is done because an invoice has to be created and delivery needs to be initiated. Thus, only at the time of a confirmed order, the details are passed on. Otherwise, at the stage of the search, buyer details are not shared with the platforms.
Will platforms pay any fee for joining ONDC and accessing its network of buyers?
Right now, ONDC is not charging for the services it is providing. We are currently focused on growing the network, and achieve momentum and then we will consider charging. We have let everybody know that sometime in the future there will be a charge.
How will ONDC handle customer grievances and complaints?
If there is an issue, the consumer will raise it with the buyer application which will then relay it to the seller application or delivery application, depending on what the issue is. In ONDC, the onus for weeding out fake products will also be on the seller applications, who will be responsible for validating the authenticity of listed products.
What data will ONDC store and are there any data privacy measures put in place?
ONDC is choosing to only have access to limited customer data that is needed for ensuring network quality and statutory purposes. There will be a system by which the records will be maintained for buyer and seller application, and can be called in the event of a dispute, but only limited to the absolutely needed data.
We will not store details of the transaction as those records will be maintained by the buyer and seller applications. We will only keep updated information regarding the overall level of the transaction so that we can provide a reliable network service.
For example, we will keep track of the total amount of transactions because we will have to provide for that bandwidth, etc. But we will not be retaining records of who was the buyer, what items were bought, etc.
How will ONDC help democratising e-commerce? Can you expand on the steps that you will take to achieve this?
ONDC is a network that everybody plugs into. As a result of unbundling, it will allow a variety of models to take place. Customers can choose different methods of delivery, hyperlocal delivery, and pick the best price in the country, among others.
The whole idea is to allow various models to be created, which will then satisfy many different kinds of use cases and thereby be able to drive growth.
Further, the goal is to allow companies who do not have a complete e-commerce solution but a component of a solution to still become part of e-commerce. For example, in the future, we can expect banks to become part of e-commerce by bringing their user base or buyers to the network and enterprise accounts as sellers to the network.
Telecom or social media companies can become part of it and so can the messaging applications. Each one will do things differently and because of that, various models will become available and drive the penetration.
Equity research firm Jefferies said in a recent report that ONDC’s value proposition is not strong enough for customers to switch from the likes of Flipkart or Amazon. What is your view of this comment?
I think it is a somewhat simplistic comment. Yes, there are certain kinds of situations where customers may not immediately see the benefits of ONDC over e-commerce platforms. But there are many use cases today that are not possible. For example, customers cannot buy household items from a hotel booking platform.
On ONDC, such buying behaviour will be made possible on a single application. So the first value proposition for customers is the universality of access.
Second, the platform can be used in various ways to suit the specific requirement. For example, choosing a specific logistic provider to get same-day delivery, etc. The opportunity to enjoy different models and discoverability are the reasons why consumers will come to ONDC.
The reason why Jefferies probably says this is because of the limited scale of ONDC today. So people who want that width of offerings may not come to ONDC because we are new. Our advantage initially will be that we have different use cases.
But as more and more people join us, we will hit the scale and once we hit the scale, we will be bigger than any one individual player. We also have to remember that e-commerce still makes up only 4 per cent of the retail market in India and the other 96 per cent is yet to come to the fold.
Jefferies’ comment is not incorrect but it is valid only in a very limited context. In the broader view, there is enough reason for consumers to start on or switch to ONDC or choose it for different requirements.
What is the timeline for ONDC launch? Can you also share the efforts that you are making toward onboarding seller applications on the platform?
We are currently running the pilot in 21 cities and customers are still only by invitation. The launch timeline is dependent on the readiness of our partners. Because in the end, we are only enablers.
We think that before the end of the month, or the middle of next month, we should have real consumers being able to shop on ONDC. Our goal is to achieve scale and therefore, we are spreading the word through various stakeholders.
Venture capitalists make a good ally in achieving this. VCs are a forward-looking group, they have their eye on the future and how it impacts their returns. They are very engaged in understanding ONDC and its implications. Several VCs that we have spoken to have told their portfolio companies to show participation on the network.
We are also engaging with industry associations such as CII, Chamber of Commerce, along with specific industry associations like Retail Association of India, Restaurant Association, etc. These bodies bring a cross-industry viewpoint instead of individual entities and help amplify our outreach.