Deloitte Report Highlights ONDC’s Significant Potential in Fostering Sectoral Growth in India

• ByStartupStory     |    September 1, 2023

A recent report from Deloitte highlights the significant potential of the Open Network for Digital Commerce (ONDC) initiative in fostering growth across key sectors including financial services, agriculture, manufacturing, and e-commerce retail. The ONDC, an endeavor of India’s commerce and industry ministry, aims to empower small retailers to leverage digital commerce. Notably, it is not a platform or application but a set of specifications designed to establish open, interoperable networks. The ONDC particularly aids MSME players in the retail sector to tap into the thriving e-commerce landscape.

“The ONDC ecosystem is expected to digitize the data available on SMEs (using the transaction data) with the help of financial technology services providers… The digitized data will enable financial institutions to develop a better understanding of this client segment to tailor products and services,” the report/whitepaper titled ‘commerce@Bharat: Redefining business models and supply chain’, said.

 It added that the increased adoption of ONDC in smaller cities and rural areas will open newer segments for banks and also drive tailored products and services catering to this segment’s needs.

 “The MSME segments have been traditionally dominated by regional players. ONDC opens up opportunities for digital-savvy financial institutions to cater to the segment,” it said.

In the manufacturing sector, the ONDC network could offer solutions to challenges brought on by disruptions in supply chains and volatile commodity prices. The presence of diverse logistics service providers on ONDC could aid organizations in optimizing logistics costs and managing increased demand effectively. Manufacturers could also benefit from the network by identifying alternative suppliers quickly and ensuring smooth operations even in the face of supply chain disruptions.

“ONDC is likely to enable the manufacturing community to tap some of these opportunities and address challenges across the value chain,” it said, adding, with the availability of a large pool of logistics service providers on ONDC, organizations can optimize overall logistics cost and manage demand increases more effectively.

ONDC’s impact extends to the retail ecosystem as well. It enables better connections within the ecosystem and with end consumers. The network provides opportunities for brands, retailers, and MSMEs to efficiently manage demand, supplier connections, and distribution points. Moreover, ONDC could aid agritech startups by addressing discoverability challenges and allowing agricultural players to access inputs, technology, and services from different stakeholders.

“ONDC creates an opportunity for brands/retailers/MSMEs to efficiently and cost-effectively address their demand and supplier connect. There are exciting possibilities in both B2B and B2C commerce,” it said, adding brands and retailers can use this network by onboarding their physical outlets and distribution points/warehousing. It added that the network can support brands to connect directly with their retailers and/or enable their distributors to expand their reach and coverage.

“The network might come as a boon for agritech startups that face the challenge of discoverability. FPOs will get access to input, technology, equipment, and services from companies and government bodies,” it said. 

Commenting on the report, Sathish Gopalaiah, President, Consulting, Deloitte South Asia, said that ONDC is a remarkable opportunity for India’s economy spanning diverse industries. 

“With a unique proposition built around agility, security, and profitability at the same time, ONDC streamlines value chains, bridges gaps, and endorses innovation paving the way for the next generation to explore novel paths,” he added.

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