ONDC provides huge growth opportunities for financial services, manufacturing, e-commerce, and agri sectors: Deloitte
According to a Deloitte report released, the government's Open Network for Digital Commerce (ONDC) initiative is offering a significant platform for the growth of four important sectors, including financial services, agriculture, manufacturing, and e-commerce retail. The Commerce and Industry Ministry launched the ONDC as a project to develop a facilitative model to help small retailers in utilising digital commerce.
It is a set of specifications intended to promote open, unbundled, and interoperable open networks rather than an application, platform, middleman, or piece of software. The network intends to assist MSME firms in the retail sectors in utilising the quickly expanding e-commerce market in the nation.
According to the report, the ONDC offers financial institutions a chance to interact with the MSMEs segment, which is mostly dependent on government schemes and non-banking financial companies (NBFCs) for credit.
The data on SMEs is expected to be digitalised by the ONDC ecosystem with the assistance of financial technology service providers using transaction data. According to the report "Commerce@Bharat: Redefining Business Models and Supply Chain," digitised data would help financial institutions gain a better understanding of this clientele so they can adapt products and services to them.
It added that when ONDC usage rises in smaller towns and rural areas, banks would have access to new markets and be able to cater to their needs with more specialised goods and services.
According to a recent report by the Reserve Bank of India (RBI) committee on MSMEs, the sector is thought to have a credit gap of between Rs. 20-25 lakh crore (US$ 240-300 billion). As per the report, the manufacturing environment has been increasingly difficult both during and after the COVID-19 pandemic, with geopolitical tensions causing changes in the trade landscape, disruptions in the supply chain, shortages of some components, and variable commodity prices. The availability of a sizable pool of logistics service providers on ONDC, it was added, allows organisations to optimise overall logistics cost and manage demand growth more successfully. "ONDC is likely to enable the manufacturing community to tap some of these opportunities and address challenges across the value chain," it said.
The network will assist in managing supply chain disruptions in the manufacturing sector because on ONDC, the original equipment manufacturers can quickly identify alternative supply sources from a large pool of suppliers at competitive prices and order the components to guarantee there will be no disruption in manufacturing operations. According to the report, the retail ecosystem (brands, retailers, distributors, and suppliers) can use the network to engage with end users and other members of their ecosystem as online sales become more significant. It added that the network can support brands to connect directly with their retailers and/or enable their distributors to expand their reach and coverage.
With the assistance of numerous stakeholders, categories like groceries, food delivery, homes and furnishings, electronics, fashion and lifestyle, beauty and personal care, and pharmaceuticals have been using the ONDC network over the past few months.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.