Executive Summary

Problem Statement
Case Background Objectives
A key challenge for ONDC is preventing market domination in the open network model
similar to current platforms. Democratization of Promoting inclusivity
ONDC's success depends on its ability to onboard MSMEs from even the remotest Digital Commerce and fair competition
parts of India.
To ensure participants maintain good catalog management, which is crucial for their
success on these platforms. Ensure user protection and
transaction safety
ONDC does not play a direct role in transactions, raising concerns about participant and
user protection.

Industry Overview Plan Of Action

1 E-commerce market in India grew from 16% to 19% of global retail in 2020.
1 Understanding the company market and industry
By 2020, India ranked third globally in online shopper base size, boasting of 140 million
2
e-retail shoppers
India's rapid digital commerce growth is driven by affordable internet, widespread
2 Identifying pain points and problems
3
smartphone use, and robust startup investments.
3 Develop solutions across multiple time frames
4 90% of hyperlocal kirana stores and around 42.5 million MSME’s are digitally excluded

5
ONDC aims at democratizing ecommerce by creating an open, interoperable network for all 4 Analyse stakeholder benefits
aspects of exchange of goods and services.
Potential gaps and challenges faced by ONDC

Core Challenges Other Challenges

Market Domination and Concentration

1 Customer Service and Reviews 3 Government Competition

ONDC needs to ensure it does not lead to Rarely any seller on ONDC offers GeM (Government E-Marketplace) has
market domination by a few players returns or exchanges and there is received mandates by the Indian
through its ecosystem. severe lack of customer reviews, government to be the sole supplier of the
ShadowFax has a stronghold as a delivery accountability and trust on the billion dollar public sector buying industry
and logistics partner in ONDC which can platform which completely removes ONDC from a
lead to the building of another monopoly major chunk of potential revenue

Grassroot Penetration 2 Inconsistent UI/UX 4 Maintenance Tenders

Different seller network participants Maintenance of ONDC is floated as

Kirana store continues to represent 75-78% offer a differently designed platform tenders, which means if one company
of total consumer goods sales in India yet to access ONDC which leads to has the maintenance tenders for a
only 0.125% have enabled e-commerce confusion among the buyers and certain period and they lose that
which shows extremely low penetration of sellers and a poor ecosystem contract the next time, it leads to
digital commerce inconsistencies in the platform.

Catalog Management
5 Beckn Protocol

User Protection and Transaction Safety Beckn is the decentralised

protocol on which ONDC is
based which also raises
Since ONDC is decentralised, there is a
concerns of scalability, security,
concern for the protection of network
safety, and regulation on the
participants and users from frauds
same
 A comprehensive analysis of the market ONGC is aiming to expand
Industry Analysis into in the coming years

Target Demographic ONGC Order Growth

Monthly Orders(Mn)
8.0
Unorganized retail is a space
6.0
where digitization is seriously
10% 33% lacking where only 10% of
4.0
Kirana Stores and 33% of
MSMEs have been digitized so 2.0
far
0.0
Jan'23 Aug'23 Nov'23 Jan'24 Mar'24
% of Digitized Kirana Stores % of Digitized MSMEs
Monthly ONDC Orders have seen an exponential rise
E-Commerce Market Size Order splits in E-Commerce since launch and widespread adoption, peaking at
around 7.5Mn orders in the month of March 2024
Zomato Swiggy ONGC
200
ONGC
60000
Industry Segments
150

100 1 Retail 5 Fashion 9 Agriculture

50 Zomato 2 F&B 6 Beauty 10 Mobility

Swiggy 2000000
2000000

0
2020 2021 2022 2023 2024 2025
3 Grocery 7 Healthcare 11 Handcrafts

4 Electronics 8 Hospitality 12 Furnishing

Reference
 Dividing the action plan into short, medium, and long term
Multi-Step Action Plan focusing on different aspects in each

Short Medium Long

Term Term Term

Technology Service
New Policies Protocol improvement
Providers
Tender Stability Strengthen Beckn Protocol
Buyer Network Participant

Integrate customer reviews, chatbot, Grassroot Agents Secure gateways and integrations
voice assistant ratings

Seller Network Participant Easier supplier-side compliance Consistent UI/UX Elements

AI-based catalogue management Fair visibility of small businesses

 Focus on improving buyer and seller network participant experience using
Short Term Plan Technology Service Providers

By integrating steps Using ML models to

like a verified reviews make a catalogue
section, using AI management
review moderation system, with
tools, and providing demand
review summaries, we forecasting,
can increase user trust recommendations,
and adaptability and anomaly
detection

Customers Reviews & AI chatbot & voice AI-based catalogue Grievance Redressal
Ratings assistant management System

Utilise Natural Resolve disputes between

Language the buyer/seller and network
Processing to participants in a manner that
integrate AI chatbots ensures transparency with
& voice assistants a multi-level redressal
which enhances the system ensuring complete
user experience ticket resolution

Short-Term Plan Medium-Term Plan Long-Term Plan Stake-Holder Impact

 Focus on improving and implementing new policies to enhance system
Medium Term Plan efficiency and outreach

Employing an agent policy Ensuring a fair playing-

where small mom-and-pop ground to small
shop owners are trained per businesses, reducing
area pincode who are then biases in search and
employed as dual agents recommendation
with the task of onboarding algorithms and focusing
and educating kirana stores on promoting
on the benefits of ONDC hyperlocal suppliers
rather than major players

Easier Supply-Side Fair visibility of small

Tender Stability Grassroot Agents
Compliance businesses

Implement long-term
Develop a better
contracts rather than
legal framework with
multiple floating tenders
less red-tape and
to ensure consistency in
easier compliances to
implementation and
ensure smoother
maintenance of the
onboarding of smaller
platform
businesses

Short-term Plan Medium-Term Plan Long-Term Plan Stake-Holder Impact

 Focus on protocol and technological improvements to ensure long-term
Long Term Plan sustainability and scalability of the platform

Enhance the working of

NP account providers,
linking them with Recon
service providers for
smooth and safe
transactions with
continuous research
and improvements

Strengthen Beckn Protocol Secure Gateways and Integrations Consistent UI/UX Elements

Implementing proper
consensus Ensuring
mechanisms and consistency of
smart contracts to basic elements
improve security and across network
strength of the Beckn participant apps
protocol and increase to achieve smooth
trust in the platform inter-operability

Short-term Plan Medium-Term Plan Long-Term Plan Stake-Holder Impact

Stakeholder Impact Assessing impact of the changes on all stakeholders in the ONDC platform

Seller App Buyer App Buyers

AI-based catalogue management Improved app interface - AI chatbots Grievance Redressal: Provide in-
system will prove to be a game- and voice assistant improve the user depth and quick customer support
changer for businesses using seller experience on the buyer app and using AI to complement traditional
apps for their data insights and analysis enhance user retention rate methods
Grievance redressel system with Rating System: Ensuring
transparency to improve trust and life transparency and organic growth of
of sellers as well as buyers products, boosting trust
Payment Gateways

Sellers Improved security of payment

Logistics Providers
gateways which leads to better user
Easier compliance & onboarding process trust as well as a fair place for FinTech Ensuring fair competition between
with offline agents improves the digital companies to earn their mettle and logistics providers, eliminating
inclusion scenario for small businesses implement technologies chances of a monopoly sprouting

Beckn Protocol
ONDC Governance Tech Companies
With research & development for
Changes in policies, regulations and Improving the ecosystem for
continual improvement of Beckn
tender system of ONDC reshapes the technology service providers to
protocol, it will lead to an increase in
governance and improves the efficiency make sure the best systems are
reliability and scalability of the platform
of the system constantly implemented

Short-Term Plan Medium-Term Plan Long-Term Plan Stakeholder Impact

Overview of the impact made by various solutions

Market Domination and Onboarding MSMEs from

Catalog Managment
Concenteration remote areas

Ensuring fair visibility of Grassroots agents will Implementation of AI

small businesses, and encourage remote MSME catalogue management
promoting extremely adoption, coupled with systems will ensure improved
local suppliers rather strategic marketing and experience of sellers and a
than a big player in a lucrative incentive schemes better reputation
major city

User protection and

New Policies Protocol Improvement
transaction oversight

Enhancing the Reducing compliance red Improving the technology,

connectivity between NP tape and streamlining the especially the Beckn protocol
account providers and onboarding process to make will ensure smooth scalability
Recon service providers the process more inclusive and viability of ONDC as it
for safe transactions with and accessible to everyone grows, while increasing the
strong grievance trust in the system
redressal system
Enabling exisitng startups How ONDC and other current Indian statups in the same space can coexist?

Platform Integration Diversification Sustainable Practices

By integrating with ONDC, Existing startups can diversify

Zomato and Flipkart can and increase their user base by Enabling EV deliveries
access a broader customer utilising core competencies of
base across regions and ONDC like the multiple segments it Prioritising logistics and delivery
demographics, including those can target companies who utilise sustainable
not currently on their platforms, Flipkart may utilise the food and delivery methods like electric
thereby increasing their market beverages category on the vehicles and route optimization.
reach platform to target new customers

Local Sourcing
Market increase
ONDC can prioritise and promote
local businesses, which reduces
ONDC will lead to an increase in the
emissions associated with
number of businesses in the digital
transportation
economy, which means a higher
acceptance and penetration of e-
Circular Economy
commerce in the grassroots of India.
Zomato, Swiggy, Flipkart etc. can
ONDC can encourage take-back
benefit from this increased market
programs where customers can return
size, which they can target by
used products for recycling or
innovation thus leading to an
repurposing
increase in revenue for the entire
industry