ONDC: Commerce@Bharat Redefining business models and supply chain

National, 31 August 2023 - To enable and educate India Inc. about numerous benefits of ONDC, Deloitte released a whitepaper titled “Commerce@Bharat: Redefining business models and supply chain.”

The pioneering initiative, the Open Network for Digital Commerce (ONDC), spearheaded by the Government of India, seeks to democratise the e-commerce landscape in the nation. At present, e-commerce contributes just about 4.3 percent to the retail commerce sector in India.

By fostering an inclusive, competitive, and open network, the initiative aims to amplify its impact across the business spectrum. ONDC is dedicated to establishing an interoperable marketplace that seamlessly accommodates sellers of all scales − from small and medium-sized enterprises to larger entities.

Through this comprehensive whitepaper, Deloitte intends to guide, handhold, and enable stakeholders towards the next phase of transformative growth.

"ONDC is a remarkable opportunity for India's economy spanning diverse industries," remarked Sathish Gopalaiah, President, Consulting, Deloitte South Asia.

"I'm optimistic about India's forthcoming growth phase, where empowerment shifts to consumers and SMEs, aligning with ONDC's mission of illuminating Bharat. At Deloitte our aim is to help customers navigate various challenges whilst leveraging the opportunities that technology and digital commerce bring together with open network.

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.”

Four important industry trends emerge in this context:

1. Empowering financial institutions through ONDC: The network presents a unique opportunity for Financial Institutions to engage with both “buy and sell” sides of a transaction. As ONDC's adoption increases, FIs stand to explore untapped segments and geographies. Regional banks' dominance over certain segments could be disrupted by forward-thinking financial institutions, bridging gaps for MSMEs to access services that were previously out of reach.
   
2. ONDC empowering brands and retailers: With the launch of B2B on ONDC, brands can establish connections with retailers or facilitate their distributors' entry into new markets. With “plug and play” capabilities (such as real-time ordering, swift delivery, and credit management) offered by eco-system participants, ONDC will enhance the experience for both brands and retailers.
   
3. Direct access for farmers through ONDC: The network champions technological utilisation, enabling direct access for farmers to inputs, services, and buyers. This transformative shift holds the potential to modernise Indian agriculture and streamline the value chain, ushering in greater efficiency and profitability. Farmers gain direct access to buyers, while Farmers Producer Organisation (FPO) can establish direct connections with potential clients, bypassing intermediaries. This integration optimises the value chain, facilitating trade amongst stakeholders (such as mandis, corporations, traders, hospitality establishments, and farm-to-table start-ups).
   
4. Optimising cost to serve manufacturers: The availability of suppliers, logistic providers, and other ancillary service providers on a single network enables manufactures to respond to sudden disruption in the supply chain. ONDC will also enable manufactures, especially small and medium scale, to access demand in markets beyond their immediate reach. Thus, ONDC has the capability to create an integrated manufacturing value chain, thereby improving operational efficiencies and effectiveness by 5–10 percent.

The ONDC network is poised to disrupt the following four key industries within the economy:

• Financial services: The industry envisions redefining offerings for digitally native banking clients using transaction data, fintech, and account aggregators. By digitising SME data and expanding banks' customer experience horizons, the ONDC ecosystem opens new avenues of commerce.    
• Manufacturing: ONDC can support India's aspiration to elevate the manufacturing sector's GDP share from 16−17 percent to 25 percent. This initiative empowers the Indian manufacturing segment to realise opportunities and tackle challenges along the value chain.
• Retail and e-commerce: The network will bring a transformative shift in how brands, retailers, and MSMEs procure goods and services. With the increasing significance of online sales, the retail ecosystem can use ONDC for streamlined interactions within the supply chain and with end users.
• Agriculture: With the potential to revolutionise technology adoption in the agricultural landscape, ONDC can unite buyers and sellers across the network.
  

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This press release has been issued by Deloitte Touche Tohmatsu India LLP.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.