In the year 2013, China did four times the digital transactions than India. There was a massive gap between both these countries. A decade later, things have changed dramatically. Today India does more digital transactions than China, the US and Europe combined. In terms of numbers, it has grown from 127 Crore digital transactions in 2013 to 12,700 Crore Rs. A growth of 100 times in a decade. And this happened mainly thanks to UPI. The government of India now wants to do the same transformation to e-commerce in the country. Currently, only 5% of MSMEs sell their products or services online. In terms of customers, only about 20% of Indians have ever bought anything online. So there is a massive potential for growth here. And they launched ONDC two years back to do just that. We have talked about ONDC in several of our videos, we had a few founders.
Who were building on ONDC, but in this video, I want to talk about why ONDC is seeing a sudden resurge nce. In the last few months, several big tech players have announced they will be joining ONDC. So why are they doing it, and how is ONDC solving the challenges? Also there is a surprise for the viewers, you get a chance to win a cash prize worth millions of dollars and get seed funding to build a startup on ONDC, please stick around till the end of the video to learn more. I want to begin by defining ONDC in one line. It is an initiative by the Indian government to make e-commerce more democratic and accessible for everyone. See, India’s e-commerce market is estimated to be worth more than 100 billion dollars, however, only about 20% of Indians have ever bought anything online. This shows a great opportunity on the demand side of things..
On the supply side, it’s even massive. Out of close to 100 Million MSMEs in India, only 5-6% are selling online. Imagine the massive potential that could be realised if all of these could come online. And this is the thinking behind ONDC. It will impact every domain of e-commerce, something that we talked about in a previous video, which you can watch by clicking on the i-button on the screen. I would also provide a link in the description. The pilot for ONDC was launched in April 2022, and it opened for public use in September of the same year. By the start of 2023, ONDC was live in 85 cities, had 85 merchants onboarded and was handling only 2,000 orders per month. One year later, things have improved drastically in 2024. ONDC is now present in over 543 cities,.
Has more than 3.3 lakh merchants on board and is doing 90 lakh transactions a month, which is a growth of over 4500 times in one year. So what changed? What made merchants excited to get on board ONDC? The first reason is the network effect. See, as new merchants and customers hear about the benefits of ONDC, they try it out and then tell more people. And because of this network effect, big companies are starting to see a value in ONDC and hence are joining it. Then there are clear benefits that people are seeing with an open network like ONDC over monopolies of various marketplaces. Things like Low Commission and more visibility. Let’s understand this with an example. If we talk about the food delivery space,.
Currently marketplaces charge around 25-33% commission from restaurants, in the case of ONDC, there is no commission. The seller apps do charge a 2-5% fee to cover their expenses, but there is no monopolisation of any sort happening here. If you are not happy with an app, there are hundreds of options for you to choose from. So more competition means less commission. Then there is visibility. Unlike, Amazon and Flipkart, where you can only sell to people on their apps, here you can sell to anyone connected to the ONDC network, increasing the visibility of your store and product. And this is helping brands of all scales and sizes. Now, it’s true that ONDC is growing extremely fast, but they are yet to solve some of the biggest pain points of merchants and customers. Because of these pain points, ONDC is not yet at.
The same level compared to marketplaces like Flipkart-Amazon and Swiggy-Zomato. And just to give you a quick comparison, Zomato does around 5.4 Crore orders a month, compared to that, ONDC does 10 times fewer orders a month. And that’s just the food delivery, if we consider the entire e-commerce, ONDC has to cover a lot of ground. And one of the biggest factors that ONDC has to solve for is ‘Trust’. I mentioned before how ONDC is solving issues like CAC and LTV for merchants but what about the buyers? Who is responsible if my order isn’t delivered? The restaurant, the seller app, the buyer app, or the logistics partner? How can ONDC set the accountability? Unless these issues are solved, buyers won’t find value in ONDC. They will continue to pay.
High commissions to existing marketplaces in exchange for better customer service. Now, it’s not that ONDC isn’t doing anything about it. They are taking several measures, including the use of blockchain to improve the inter-app experience. And the first thing they are solving for is ‘Ratings’. Ratings are directly connected to trust – higher and more ratings mean a seller you can trust. Currently, you can only provide ratings for orders that are fulfilled, so in the case of an order not getting delivered, there is no way to rate the sellers, which is a huge problem right now. And ONDC is using Blockchain to solve this problem. They have launched CONFIDEX, a blockchain-based solution to establish ‘transparency’ and ‘trust’.
So let’s say you are using Paytm to order Pizza from Dominos and it’s being delivered through Dunzo, at the end of the delivery you can rate both Dominos and Dunzo. Once you do that – both these partners’ rating goes through the network and is stored in this blockchain – which means no one can then change it. The best part is, that this rating is available across the ONDC network not just on the app you used, Paytm in this example. This is great for users and also sellers, who are providing excellent service. This is unlike Amazon or Flipkart, where you have to build your reputation and ratings from scratch when you decide to move to a new platform. This use of Blockchain gives the ability to provide a better and much more enhanced rating system in the future. In fact, ONDC is planning to collect these ratings and.
Categorise their sellers into different tiers – giving them badges like Diamond, Gold, and Silver – to make it much easier for their customers to identify the seller’s quality. Ratings are just the first step forward in improving the customer experience, and with the help of blockchain, ONDC could become the e-commerce disruptor, it was promised out to be. In this section, I want to talk about the other potential opportunities that ONDC could work on with the help of blockchain. First is an ONDC-wide ad network, where ads are served to the customers based on their preferences. Or a recommendation engine, which is tailor-made for each user based on their preferences and behaviour across the entire network.
Then there is pricing, which can fluctuate depending on the user’s spending power or location, for eg. Netflix is cheaper in India than in the United States. Same way, companies could charge different prices depending on the spending power of a user in India. And finally, coupons and discounts, which could be dynamic and automated, and could be used across the entire network. Now this is not something unheard of. In fact, companies like Amazon do provide these tools and features to their customers. If you use Amazon, you get platform-wide discounting tools, the ability to advertise to all of Amazon’s customers and you can access Amazon’s massive fulfilment network.
ONDC doesn’t have any of these. You want discounting tools? Build them yourself. You want to advertise. Do it on Google, or Meta. Fulfilment? This is not smooth as well, despite ONDC having multiple logistics providers. The biggest missed opportunity of them all is the lack of personalised recommendations. Right now, buyer-side app interactions with customers are siloed – the rest of the network doesn’t benefit from these relationships. What if, instead, the data collected from an interaction between a buyer-side app and a customer was recorded and distributed to other network participants, so that everyone could know more about that customer and their preferences and behaviour? Now when we talk about customer data being spread across the entire network,.
Someone could come and raise the issue of ‘data privacy’, and yes, it’s going to be a challenge for ONDC, however, blockchain may be one way to protect consumer data while simultaneously distributing it in an opaque, non-identifying way to network participants. I’ve already spoken about how Confidex is a piece of ONDC blockchain infrastructure specifically to improve ratings and support. Now imagine if there were other blockchains to support an ONDC-wide ad network, or discounts, or coupons, or pricing, or a recommendation engine! THIS infrastructure is the path forward for ONDC. It is the path to ONDC becoming as big and ubiquitous as UPI someday. Of course, this isn’t gonna happen overnight. Someone is going to have.
To build all of these tools, all of this infrastructure – and guess what? There’s actually an opportunity for YOU to do this RIGHT NOW, with the possibility of winning quite a bit of money if you build something substantial. How? Well, there’s a FREE startup competition structured as a hackathon being put on by Solana called the Solana Renaissance Hackathon, and ONDC has partnered with Superteam India to offer a dedicated prize track for this hackathon specifically for people building for ONDC! Now, there is a prize track of $10 Thousand just for people building for ONDC using Solana and this is in addition to a global prize pool, which is worth millions of dollars. And if you plan to build a startup on ONDC, you also get a chance to win seed funding for it.
This hackathon is five weeks long. It started on the 4th of March, but you can still join even though it started a few days ago. This is a global online hackathon, so you can participate from anywhere in India or the world. Coming back to the ONDC track for this hackathon, the goal here is to build products with the potential to impact 1.4 billion people. And here are a few ideas that ONDC is looking forward to: A marketplace for coupons & offers with a funding mechanism for buyers and sellers. A negotiation engine for enhanced logistics services through an order book system. An ads exchange that tokenizes inventory making it freely tradeable across network apps. Asset tokenization to enable recurring fractional purchases for precious metals like gold..
Skilling ecosystem to manage certificates and job listings across ONEST and ONDC NPs. Seller blacklisting mechanism to identify repeat offenders across the network. Or, any other creative idea you might have for increasing volume on ONDC Projects will be evaluated based on usability, innovative blockchain use, adaptability, and compliance with local data & other laws. If you need help getting started with Solana, you can reach out to Superteam India, which is a community of founders, developers and operators from the Solana ecosystem who can help you navigate the tech, product and wider ecosystem. Participation is entirely free,.
And you can find the link to sign up in the description and pinned comment down below: And big thanks by the way to Soloana for sponsoring this video.
