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We’re creating sparks right now, the explosion is yet to come: T Koshy, ONDC

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Shiv Joshi
Shiv Joshi
An editor with over 20 years of experience across industry verticals and content formats from tabloids to magazines, he is the Deputy Group Managing Editor at Images Group.

T Koshy, managing director and chief executive officer of ONDC speaks about the initiative’s progress so far, its ambitions and potential…

New Delhi: On 29 April 2022, Union Minister for Commerce and Industry Piyush Goyal tweeted about a revolutionary initiative by the Indian Government—Open Network for Digital Commerce (ONDC). “After UPI, another game-changing idea to democratise commerce – ONDC soft launch today to select consumers, sellers and logistics providers. Get ready for a world of choice, convenience and transparency,” Goyal tweeted. 

With a tagline, ‘Everyone’s Commerce! Where anyone can sell and everyone can buy from each other online,’ ONDC seeks to democratize digital commerce in India, disrupting it in the process.

ONDC was set up as a private not-for-profit company under Section 8 of the Department for Promotion of Industry and Internal Trade (DPIIT). Section 8 companies are set up with the purpose of social welfare and furthering technology and its profits are utilized in promoting its objectives.

To head ONDC, the government onboarded T Koshy, who has held several executive positions over his expansive career where he has served as the Executive Director of NSDL and a partner at EY.

ONDC was piloted in five cities: Delhi NCR, Bengaluru, Bhopal, Shillong and Coimbatore before going live in January 2023.

In an exclusive interaction with IndiaRetailing T Koshy, managing director and chief executive officer of ONDC speaks about the initiative’s progress so far, its ambitions and potential…

Where has ONDC reached in terms of numbers since going live in January? 

We started giving a special push in January to make it widely available to a larger cross-section of consumers. Till then, we were only allowing friends and relatives and close community to check it out. 

At the time, we had 800 merchants doing about 50 transactions a day. Today, there are about 1,35,000 merchants, doing about 100,000 transactions a day, out of which, a significant 70% is mobility (ride booking). In the remaining 30%, as of now, food comprises 65-70%. 

So different things are picking up momentum, that’s the beauty. People are experimenting now that the other products are also there, and intercity delivery is also possible. 

As per our analysis on 3 August, people from at least 620 cities or towns have bought something or the other.

And every day the delivery is happening in about 75 cities. At least twice a week 25 cities see more than 100 orders. 

These are really small numbers for e-commerce…but the good thing is that a variety of merchants from the big guys like HULs to startups, entrepreneurs and restaurant owners are all joining with a vengeance. That is because they believe that ONDC is giving them humongous power as brand owners, which they did not have until now. As more people learn about it, we will see more and more participation.

How did you expand category-wise?

We started with grocery and food, then we added mobility, and then in the recent past, we added beauty, personal care, fashion, and a variety of consumer goods.

We started B2B last month. Soon, we plan to introduce financial products.

In the last few months, we have grown leaps and bounds. Although it will take some more time before the hockey stick effect kicks in. 

Hockey stick Effect

It is a growth pattern exhibited by a company in which an initial period of stagnant growth is followed by an exponential increase after a point of inflexion is reached. 


When do you think it might happen?

I can’t say, but I’m confident that with the kind of attention that is coming from a variety of participants like startups, sellers, merchants and technology companies like Google and SAP, who believe that this is good for everybody, it is a matter of time.

Except for a few large established players who may not be very comfortable, the majority of the industry is favourable and wants us to succeed.

With that kind of positive mindset, it’s a question of ironing out processes. And I believe that in a few years, you will see that practically every product or service provider will be on the open network. It’s a matter of time. It’s not a question of whether it’s a question of when.

Comparing ONDC with UPI….

We are too young. If you remember, the Unified Payments Interface (UPI), as an idea, started boiling up in 2013. In 2016 April, it was inaugurated by Governor Raghuram Rajan, who was the RBI governor at the time. And it took some time to find acceptance because it was completely disrupting the payment system.

The hockey stick effect took off in 2018-19. In comparison, we only started last year.

Are we getting enquiries from other countries for ONDC?

There are people around the world who are trying to learn. Today, the Financial Times already covered us twice, the Wall Street Journal covered ONDC three times, and Times magazine covered it once.

Everybody is saying: What are these guys up to? Because the problem that we are trying to solve here in India is the problem everywhere in the world—the problem of concentration and associated practices. 

So, they are all looking at how far we are going and I’m sure that it’s a matter of time before they learn from here, adopt from here or come out with a newer innovative version of it.

But we will create a new benchmark, a new example.

How are marketplaces responding to ONDC?

Established businesses will take time to decide how and when to participate in a completely unique experiment. So, they are discussing, they are not saying no. Again, it’s a matter of time.

When they do come to you, how will it change the status quo?

They may have to adapt to the new rules. And if they’re comfortable exposing their sellers to a large cross-section of buyers and allowing their buyers to discover a lot of products from a variety of entrepreneurs they will prosper and benefit. 

When they come, the market is going to grow. Remember what happened with UPI? We used to have 250 million transactions a month. Today, there are 9 billion transactions. 

Similarly, today in the digital world, is e-commerce only 5%-6%. Even if we grow two or three times, it’s good. 

It’s about expanding the market it’s about making opportunities available for a large cross-section of sellers and buyers; not just to a five-star club. It’s about the five stars, the three stars, the two stars…everybody co-existing like in the physical world.

We’re creating sparks right now; the explosion is yet to come… it will come when we get the volume.

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