Tried ONDC Yet? No? We Did It For You!

The Open Network for Digital Commerce, touted to be the ‘UPI of e-commerce’, was beta tested across 16 PIN codes in Bengaluru on Friday.

Nagged by the fear of missing out while sitting in Mumbai, and after a short flight and a long commute in India’s Silicon Valley, we now know.

Here’s how it works:

Three parties are involved in completing a single transaction on the network—buyer, seller, and logistics applications.

Consumers can place their orders through ‘buyer apps’ participating on the network. ‘Buyer apps’ refer to applications or websites that enable consumers to shop from all sellers available on ONDC.

Among the available ‘buyer apps’ are Mystore, Paytm, and Spicemoney. We used Paytm.

If opened in at of the 16 PIN codes, right under the UPI transfer box, a tab powered by ONDC shows a link to order food and grocery.

Currently, the customer can only order food and grocery, with the network planning to rollout other categories in due course.

Customers can purchase from every seller listed on the network. That includes merchants on other e-commerce platforms as well, along with some local sellers for whom ONDC marks their first digital presence.

Right now, distance is a factor. However, ‘any seller’ is expected to be enabled once more logistics partners are live on the platform.

Buyers can add items to the cart and make a purchase as they do on other e-commerce platforms. For the beta test, cash-on-delivery is not applicable.

‘Seller-side apps’ enable merchants to join the network, making their catalogues and inventory visible to buyers. SellerApp, Bizom, Digiit, Enstore by Innobits, eSamudaay, eVitalrx, Go Frugal, GrowthFalcons, Mystore, nStore, Uengage and Ushop are a few participating in the beta test.

Dunzo, Loadshare and Shiprocket are providing logistics services, while Protean eGov Technologies Ltd. (formerly NSDL e-Gov) is providing gateway services.

The open network is expected to make e-commerce more inclusive and accessible for consumers and sellers. They can transact irrespective of the platforms or applications they use if those are connected to ONDC.

Several users, however, have complained of not being able to use the buyer apps for ONDC. For them, the option is not showing up.

A To Z Supermarket was already digital before ONDC. The store received close to 250 orders a day from its delivery partners alone. Then, some of these delivery partners opened their dark stores, and A To Z’s orders fell to about 50 a day.

“It’s a big issue,” store owner Deepak Kumar said. The apps that haven’t yet opened their dark stores will soon do so. So, it’s better to have more options, he said.

Since on-boarding on the platform, he has been receiving 10-15 orders a day through ONDC, most for items such as honey, rice and biscuits.

Ayesha Sayeda, owner of Nomad Rolls and Shakes, received two orders the day they went live on ONDC. “It’s a good start. We will pick up.”

The network is helping keeping commission rates low. “Other aggregators can charge up to 30% including taxes,” she said. “So, it’s a great relief to now be paying closer to 12%.”

Brands that are more popular get lower commission rates, she said. “When commission rates are different, we have to charge different rates on different platforms.”

The move, Sayeda said, can help increase visibility and get more business. “With lower commissions to pay, we can give discounts or offers for visibility, or charge less to be more competitive… It will be more profitable for us and even for customers—the delivery charge, the surcharge, all other charges will be less.”

It’s a game-changer for small restaurants like hers and for cloud kitchens, she said, because the commission rate is low.

“I don’t have expectations now. I know it will take time, she said. “I know if the government has launched something like this—taking small businesses digital, it will of benefit in the future.”

Like all other platforms, on-boarding has been really easy and simple, she said.

Jalaludin, store manager at Fruitland in Indiranagar, said the prospect of having to pay less commission makes the network attractive. Besides, the government’s backing ensures safety and security. His store will soon go live on the network. It’s unavailable on other platforms because of the commission charges, Jalaludin said.

On pilot day, up until 5 p.m., the network had received 161 orders, with 88 coming from Paytm. The others were from IDFC, Spicemoney and Mystore. While 55% of these comprised grocery, food accounted for the rest.

Right from the beginning, from the hackathon, which piqued interest over how the transaction would flow, the network’s strategy has been very controlled, said Brij Purohit, co-founder at SellerApp—one of the seller-side apps responsible for compliance, catalogue listing, payment aggregation, refunds and return-related issues, along with integration with logistics partners.

“After the hackathon, we moved to an integration phase in a closed user group where multiple issues were fixed. Then, we moved to a broader audience,” he said.

For small kirana stores not digital-savvy, there has definitely been a need to handhold them, and train them, Purohit said.

In the future, there will be a lot more use cases that will be served on this network, he said. Any transaction that involves two businesses and a facilitating intermediary can be on the network—cab bookings, services bookings like home cleaning, healthcare, insurance, hospitality. “We understand it’s not a six-month or a year’s game. It will take time to evolve.”