In a significant development, the Open Network for Digital Commerce (ONDC), supported by the government, surpassed 5 million transactions in a single month for the first time in December. The surge is primarily attributed to a remarkable uptick in retail e-commerce purchases, marking a colossal increase of over 1,700 times within a year.
Transaction Breakdown:
Of the 5.5 million transactions in December, 2.1 million were in the retail category, while 3.4 million were attributed to the mobility category. Notably, food delivery and fashion purchases each accounted for a third of the retail orders, signaling a diverse consumer interest, with newer categories like cosmetics and electronics also contributing.
Evolution of Transaction Share:
This achievement contrasts sharply with the transaction distribution in early 2023, where retail constituted a mere 5-10 percent, dominated by the mobility category with 90-95 percent of all ONDC transactions.
Retail purchases on ONDC have seen an extraordinary growth rate, escalating from 1,281 in January to an impressive 2.1 million in December, showcasing the platform’s rapid expansion and acceptance in the market.
2024 Expansion Plans:
While 2023 laid the foundation for ONDC by onboarding a substantial user base, 2024 is poised to be a pivotal year for its scalability. The government-backed network aims to significantly intensify efforts, targeting a monthly transaction run rate of up to 8 million by the end of FY24.
Industry Response and Future Prospects:
Several major players, including new-age unicorns like Paytm, Ola, PhonePe, Meesho, Magicpin, and Shiprocket, have embraced ONDC to challenge the dominance of established players like Amazon, Flipkart, Zomato, and Swiggy. Traditional FMCG giants like Unilever and ITC have also joined the platform to sell directly to consumers and reduce distribution costs.
Feedback from participants, combined with the entry of both new and traditional players, signals a positive trajectory for ONDC’s future growth. Despite not achieving its initial goal of 100,000 retail orders a day in 2023, the platform’s scalability and potential have convinced many stakeholders.
