The Open Network for Digital Commerce (ONDC) is aiming to facilitate up to 40 million transactions per month by FY25-end, MD & CEO, T Koshy, told businessline in an exclusive interaction. The network has a pipeline of 25 lenders to join its credit services and plans on introducing the mutual fund service on the platform next month. Edited excerpts:
What is the target of volumes that you aim to achieve by FY25 end?
We did 12 million transactions in July and are hoping that by end of this fiscal, we would be around 35-40 million. We are aiming to expand the product bouquet on the financial services side. On the insurance side, we did one or two trial transactions and it went well. So now we will expand that service, just like we have done on credit side. We may start mutual funds by next month. So by next year, all products would be stable enough to build on.
You have onboarded three lenders on the ONDC platform to provide credit services. How many more lenders are you looking to add?
We published the lending protocol initially and got a cohort of lenders to participate. We wanted to make sure that it works, so we got some early adopters. A few thousand loan applications were received and around hundred loans were passed. Not all applications could be accepted, and were subject to pass bureau checks as the lender takes the final call. We have now identified bottlenecks and are fully ready for business. We believe a lot of players will participate, going ahead. We started with mobility, grocery and food, and out of 12 million monthly transactions in July, significant volumes come from here. Rest of the segments like beauty, personal care, fashion, logistics started only a few months back and is only gaining traction. The financial sector is digitally savvy and I am hopeful that more players become the part of open network. We are in talks with around 20-25 lenders, (including HDFC Bank, Kotak Mahindra Bank, Central Bank of India, Tata Capital, among others), as demand is higher than supply.
Will large banks be open to joining ONDC network rather then acquiring customers on their own?
If they are able to engage on their own, they will do that. But now the ability to engage with customers will be limited to their own tech infrastructure. Whereas, here you already have a whole network and a lot more customers. So they will like to play on both sides.
Have you onboarded Amazon, Flipkart, Reliance on ONDC?
I am sure that they will come. They are an established business. They are already running businesses, so for them to join is not so critical. As we build up they may come some day. Secondly, they already have certain ways of doing things. So if they will have to adopt, the process will be technically challenging, so they will not be the first ones to come. But they will eventually come, it is my belief. Our idea is inclusive, we are not competing with them.
What are some of the strategic initiatives planned for the year?
The biggest tasks are — i) getting digitally mature people to come onboard the ONDC platform so that order per day rises. ii) work very strongly with small and marginalised buyers and sellers, to help them participate in digital world. On merchant side, we have around 7 lakh service providers as of today. Last July, it may have been around 20,000. Let me also tell you that some clients may appear as one client, like a farmer produce organisation (FPO) for example, but the FPO actually serves thousand of farmers, which enhances our actual scope of services to a larger base. When we created mobility suite, Ola immediately did not join ONDC, but it did opt to join our food segment later. On the consumer side, the festival season is coming and I want all consumers to start using ONDC for gifts and stakeholders must create awareness regarding the various use-cases of our network.
Published on August 22, 2024
