ONDC to enter financial services; releases draft specifications
What's the story
ONDC, or Open Network Digital Commerce, is aimed at transforming India's e-commerce. The government-backed network has already shown glimpses of what it can do in food and grocery delivery, ride-hailing, and more.
Now, it plans to add financial services to the platform. ONDC has released the draft specifications for trading financial products.
They are aimed at attracting financial services providers to the platform.
Aim
ONDC aims to provide a diverse inventory
The government's goal is to create seamless and interoperable services by incorporating diverse inventory, including gift cards, personal loans, and invoice-based credit, at scale.
In the next two to three weeks, feedback from banks, NBFCs, and buyer/seller apps will help finalize these specifications.
It needs to be seen how banks and other financial services providers like PhonePe and Paytm react to this.
Details
Centre plans to increase e-commerce penetration by 25%
The government hopes ONDC will increase e-commerce penetration in India to 25% within two years, connecting 900 million buyers and 1.2 million sellers.
To reduce business costs for retailers, ONDC focuses on three key pillars: dynamic pricing, inventory management, and delivery cost optimization.
The success of ONDC could significantly impact the Indian e-commerce and financial services industries.
What Next?
ONDC is expected to generate $48bn in gross merchandise value
Since its inception, ONDC has achieved over 1.1 million retail transactions and 5.4 million mobility transactions, thanks to promotional campaigns by network participants like Paytm, PhonePe's Pincode, and Magicpin.
ONDC plans to target Tier 2 cities and beyond in its next incentive scheme iteration. The network is projected to generate a gross merchandise value of $48 billion.