The number of daily transactions on government backed e-commerce player Open Network for Digital Commerce (ONDC) is likely to touch 2.5 lakh by the end of FY24, ONDC Managing Director Thampi Koshy said.

The number of transactions on the platform has grown from a mere 1,000 in January to 3.3 million in September with the mobility sector contributing 2.7 million transactions.

While ONDC has no usage charges now, it is eventually expected to have a nominal fee, Koshy said.

The network will ultimately be scaled up to “include everything (product and service) that can be catalogued”, he added.

A B2B segment has also been launched which saw 30,000 transactions in a month with just 2 sellers and 2 buyers on board.

According to Koshy, while one lakh daily transactions are expected by the year-end across non-mobility categories, the mobility sector will drive transaction numbers to around 1.5 lakh.

Till September, the number of transactions touched a peak of 1.63 lakh across mobility and non-mobility sectors.

“As the portfolio of non-mobility sector increases, more FMCG majors come on-board, kiranas are brought online, the numbers in retail will increase. The plan is to hit 2.5 lakh transactions per day by year-end,” Koshy told businessline, on the sidelines of a Credai summit.

ONDC is based on open protocol to enable broader participation across verticals such as mobility, grocery, food order and delivery, hotel booking and travel, among others.

Nominal Fees

Discussions are on to introduce a “nominal fee” across platforms—on both buyers and seller—as the network achieves critical volume. 

Transactions on ONDC are not charged (by ONDC) as compared to other e-commerce platforms that charge commission (also called platform fees) for listing as well as sales.

At a later stage, there could be a charge by ONDC, which will come in for transacting on ONDC, too; but it will be a bare minimum, he hinted.

Also read: E-commerce players see uptick in demand, order in festival season sale 

“The idea is not to monetise, but become self sustainable; to create a sustainable ecosystem while bringing small businesses on board. So, at some point, we will come up with a nominal fee from participatory platforms or buyers and sellers. At the same time, it has to be seen that the process does not hurt small sellers,” he said.

Profitability 

Profitability for network participants is expected to follow as volumes go up and more products get listed. 

According to Koshy, deep discounting models and end-to-end control by platforms over its ecosystems are not a “sustainable business model” in an open network. 

Also read: ONDC launches gift card for consumers, corporate gifting 

“Currently, the e-commerce model is about creating walled gardens (closed ecosystems of select sellers and buyers), rent seeking, and throwing good money to get people engaged to platforms (deep discounting ). So costs are high, and profitability continues to elude many,” he said, adding “so for ONDC ecosystem, profitability will automatically come in the long run.”

(The writer was in Egypt at the invitation of CREDAI.) 

Related Topics
comment COMMENT NOW