For nearly half-a-decade now, the retail-commerce industry has been trying to figure out how the space can stay adept and thrive alongside the booming e-commerce giants. Local merchants, offline sellers and Small to medium businesses (SMBs) continue to struggle to break into the power that lies at the fingertips of a few e-retailers today. Add to that, the pandemic-led uncertainties and tougher operational conditions have bolstered the use of online shopping leaving local sellers at the behest of this duopoly that is run by a few big players. According to a reportthe Indian e-commerce market could become the third largest market in the world with US$360 billion in 2030.
In the post-pandemic era, as customers begin returning to offline stores to shop in person, a dire need has been felt to allow them to receive the best of both worlds in terms of both online and offline modes of shopping. And this is where the role of the Open Network Digital Commerce (ONDC) and emerging tech-led interventions are set to become increasingly important in the upcoming years.
ONDC: A Force Multiplier for India’s Retail Growth
ONDC, a non-profit initiative and platform backed by the Government of India with the aim to democratize new-age commerce, is a commendable endeavor wherein individual local sellers, vendors and small-to-medium-sized retail shop owners or merchants, can register themselves through a public digital infrastructure that will facilitate free flow of goods and services and then buyers can discover them across the nation easily. This shift from a platform centric model to a network that is open to all, plans to create a field that is inclusive of the MSMEs and local retail shop owners. By significantly increasing the visibility of the sellers, and allowing them to carry transactions regardless of what platform they use, ONDC is bound to bring a plethora of opportunities for the local retail industry players in our country. In the longer run, such initiatives are predicted to pace up digitization for individual sellers, who were previously solely relying on the offline/brick-and-mortar model.
With tech-enabled open-source protocol at its core, the ONDC initiative has the potential to create immense value-addition for India’s millions of local sellers and retailers not just by making them more easily discoverable to potential buyers, but also resolve multiple roadblocks including , cataloguing, inventory management, price discovery, and so on. At the same time, it will also help the retail merchants to make major savings on commissions paid to the large e-com marketplaces, and also enable them to avoid the perils of deep discounting, predatory pricing, and various other unscrupulous practices of the large e-commerce giants. Given that over 80 percent of the market in India is constituted by unorganized retail players, ONDC shall act as a catalyst and a boon for this segment as well as for other emerging or allied segments such as hyper local commerce, hybrid-commerce, and quick commerce.
The Butterfly Effect
Technology was made to make our lives easier but its concentration to only a few tech giants who have capitalized on it have given them an unfair trade advantage. Initiatives like ONDC mark an awakening moment for small sellers to co-exist within this space. When it comes to the retail sector, ONDC will be working to make improvements across the value chain spectrum to help local retail stakeholders and tech startups – be it for product discovery or marketing, sales conversions, managing customer expectations, customer engagement and loyalty, or scaling up in terms of community engagement and so on. To embrace independent brands and e-tailers, emerging-tech integration will give them a significant edge in areas like stock management, sales automation, and customer servicing. And with every passing year, the impact of emerging-tech will become more prominent and useful.
Today, an array of emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), Virtual Reality (VR), and others are already playing an incremental role to pave the way for future-ready, progressive innovations within the new- age commerce and shopping ecosystem. Furthermore, such technological advances are also allowing for optimized product discovery, availability and convenience towards all the stakeholders of the ecosystem, just in a similar way to what ONDC is attempting to achieve. And this is why, ONDC and emerging-tech can be said to be playing complementary roles to each other, when it comes to the continued growth and development of the domestic retail economy. The process of achieving this shall be further eased with the emergence of hybrid commerce – which uses technology once again to achieve better convenience and customer satisfaction.
The Path Breaking Promise
When it comes to modern-day trade and commerce, it is unfortunate to see that today there exists a massive information asymmetry between the buyers and sellers across India. Also, the local retail sector in India is riddled with a variety of other issues such as outdated and unorganized operational strategies, lack of visibility and multichannel approach for marketing and sales, resistance to change and technology embracement, limited product discovery and customer outreach options leading to a drop in customer retention and profit margins.
But going forward, ONDC and emerging-tech shall together form a powerful combination that can be helpful in overcoming these challenges and take rapid strides to revolutionize the retail ecosystem forever for the better. Embracing ONDC and various other types/platforms of emerging-technologies can bring tremendous value for India’s small and independent local business owners and help them gain a level-playing field by providing them access to technology prowess that has previously remained just limited to the big players in the industry. By focusing on and promoting hyper local trade and prioritizing local retail sellers and small businesses, this ushers in a new era for our economy altogether!
Disclaimer
Views expressed above are the author’s own.
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