Prime Minister Narendra Modi recently praised the Open Network for Digital Commerce (ONDC) for its transformative role in revolutionizing e-commerce and empowering small businesses across India. ONDC, launched in 2021, has been designed to democratize digital commerce by providing a platform for a wide range of businesses to access online markets, especially smaller players who previously struggled to compete with larger platforms.

Union Minister for Commerce and Industry, Piyush Goyal, highlighted the significant strides made by the platform. With over 200 participants, including 700,000 sellers, ONDC has expanded its services across 600 cities, helping businesses reach a broader audience. Since its inception, ONDC has facilitated over 150 million transactions, covering 1,110 cities and towns across India. By November 2024, the platform had achieved 14.4 million monthly transactions, with a goal to increase this number to 30-40 million by March 2025.

The platform’s growth trajectory has been impressive, attracting numerous startups and unicorns, such as Zerodha, PolicyBazaar, and Physics Wallah. These companies have expanded ONDC's reach across various domains, including food delivery, e-commerce, and cab-hailing services. This multi-sector participation is a testament to the platform's potential to transform the Indian digital marketplace and offer a more inclusive, competitive environment for all businesses, big or small.

However, ONDC's journey is not without challenges. One of the major hurdles the platform faces is visibility. While it offers cost-effective access to a massive audience, some brands report struggling to achieve the same level of sales success as they do on larger, more established marketplaces. For example, True Elements, a brand that joined ONDC in early 2023, saw a significant decline in sales in 2024 when compared to their performance on other platforms. Their gross merchandise value (GMV) on ONDC was much lower than on competing digital marketplaces. This disparity highlights the ongoing challenge ONDC faces in improving its awareness and customer engagement, ensuring its users can fully capitalize on the platform’s vast potential.

Despite these challenges, ONDC continues to evolve, and its potential for reshaping the Indian e-commerce landscape remains immense. The platform aims to provide a level playing field for small businesses, particularly in tier-2 and tier-3 cities, giving them access to a mass audience that was once difficult to reach. To maximize ONDC's impact, increasing its visibility and improving customer experience will be key to unlocking its full potential.

The future of ONDC in India’s digital commerce ecosystem looks promising, and with continued growth and improvement, it could become a leading platform for empowering small businesses and driving the next wave of e-commerce innovation.

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