ONDC faces weakening growth online, snags likely to hit expansion

The government-backed Open Network for Digital Commerce (ONDC) is yet to gain any significant traction for online orders, a report by the Economic Times (ET) said.

Electronics, fashion items, smartphones, and others are widely regarded as the primary drivers of online sales across marketplaces. While ONDC as a network has grown to around 20,000 daily orders from around 1,000 in March, 97-98 per cent of the orders have been for hyperlocal deliveries of food and grocery deliveries, said the report.

Thampy Koshy, chief executive officer of ONDC, stated that the network, which began in December 2021 with groceries and food, has only recently added more categories and merchants.

When asked about the network's customer traction, Koshy said, "Now that the other domains have been enabled, we expect them to pick up in the coming weeks."

Meanwhile, a number of network users pointed out issues with the system, which was initially introduced to challenge the dominance of existing players like Amazon India and Walmart-owned Flipkart.

"The ONDC network encounters obstacles as it is expanding its presence across the nation- from sellers not updating inventory listings and payment reconciliation issues to delivery frauds and logistical hiccups," said ecommerce executives with knowledge of the matter.

The executives, who closely monitor ONDC's ecommerce integrations, reported that order returns and rejections for online purchases made through ONDC partners have been high in recent weeks.

Another executive in the ecommerce sector claimed that "sellers have not been prompt in resolving customer queries, even while testing in closed user groups."

Ecommerce sellers, on the other hand, stated that merchants had yet to track their listings and inventory situation on the ONDC network as sales were still low compared to food or grocery.