1. You go to sellers and convince them to upload what they are selling, how much stock they have, and prices to an app. You approach all kinds of sellers. Maybe it’s that Jaipur family selling carpets and rugs. Or that local kirana store selling soap and biscuits. Your pitch to them is simple—“Just do this, and you’ll get more sales”. Not everyone is convinced it’s worth the trouble, and several tell you they can do this easily, especially because they upload all this on platforms like Amazon, Flipkart, Meesho, and Dunzo anyway. 
    
2. You then approach a few startups in Bengaluru, and ask them whether they want to help build an app that helps sellers upload their catalogue and inventory in real-time. You tell them you have customers for them; that practically anyone can build this app, especially because the specifications of how these sellers will upload their products are public and standardised. Many of them jump at the chance and build these apps. Soon, you have access to catalogues and real-time inventory of a ton of sellers. 
    
3. You then go to a company that has an app with a ton of users, but no business model. Maybe it’s an app that people use to book cabs. Or one they use to pay their electricity bills. You tell the company, “hey, I have all these catalogues from all these sellers. Do you want to show it to your users?” Maybe they’ll find something they like and place some orders. You offer them a cut. You tell them it’s a simple integration. Duh. Of course!, say all the companies. And very soon, when users open an app to watch the IPL, they notice that the local kirana store has a big sale on brinjals.  
    
4. Finally, you go to a few logistics and delivery companies. You say you have a ton of orders made by all these users from all these sellers. If they accept the job, they would need to pick stuff up from this place and deliver it to that other place. Can they do that? Sure, say the delivery companies. 
    
5. You wait. Over time, more and more small sellers find out this is working for them. They tell others. More sellers come. Meanwhile more apps find out that it’s ridiculously easy to show products to their users and nudge them to buy. Soon, everyone builds a shopping tab on their app. Every seller has access to all buyers, and all buyers have access to all sellers. 
    
6. You’ve built an open network, defined standards, and waited as everyone involved in the chain, from buyer to logistics player, plugged into it. Small sellers rejoice now that they’re no longer being exploited by big ecommerce. Amazon and Flipkart weep silently. 
    
7. You win lots of elections. 

The ONDC believes that the reason why everyone is lining up to join them is because they sense a massive business opportunity. 

They are right. 

But not in the way they imagine. 

Ask yourself why Amazon and Flipkart are in talks to integrate with the entity that’s been created to undermine and reduce their power and influence. From banks to logistics players, everyone has their own reasons to join the ONDC. They are rushing into the fire, instead of running away from it. 

All of them have their reasons. 

For some of them, the ONDC is an opportunity to seize power. 

For others, it’s a way to make up for past strategic mistakes. 

And for some, the ONDC is a weapon to strengthen their position, and increase market dominance. 

Let’s dive in.

Who owns the ONDC? 

Well, the ONDC is a non-profit entity, but see if you can spot a pattern around all the entities jumping to buy a stake in it.

But why are banks so eager to hop on to the ONDC bandwagon? 

The answer is because they made a strategic mistake the last time a similar opportunity came their way. 

Banks don’t want to make the same mistake twice

Back in 2016, when the UPI was rolled out as an open protocol, it was to enable anyone to send money to anyone else, just by using an id. At the time, banks had to integrate into it because that’s where all of India’s consumers kept their money. 

Let’s just say that they took their time doing it, and weren’t particularly enthusiastic. 

They paid a heavy price for this because banks vastly underestimated how ubiquitous UPI would soon become. Back then, if you were a consumer and wanted to transfer money to someone, the only apps you’d use were your banking apps and maybe Paytm. In a few short quarters, Google Pay, Phone Pe, and all the others came to the fore, and banking apps practically disappeared from the phones of millions of users. 

Here’s my colleague, Arundhati, who wrote a wonderful story a couple of days back on how India’s banks are looking to even the score and become relevant again, especially around digital payments. 

She included a pretty striking chart. 

This time, they want to cash in on the ONDC. 

Paytm solves a thorny problem 

Around two weeks ago, Paytm announced that it was going all-in on ONDC on its e-commerce store Paytm Mall. To date, it remains the only company that has enthusiastically and publicly thrown its weight behind ONDC. 

Paytm announced this at the same time as it announced the exit of two of its key investors, Ant Financial and Alibaba. Exit China. Enter India. 

But more importantly, a big reason why Paytm seems to be jumping on the ONDC bandwagon is because it’s in the best position to gain from it, while also solving for a thorny problem, i.e; seller acquisition. Paytm has over 150 million active users, which makes it one of the largest apps in India in terms of users. And while it may seem like Paytm, which basically solves seller problems, would crush it in e-commerce, the reality is that as a business, Paytm Mall has been underwhelming. After a meteoric start, the business has shrunk considerably, and losses have mounted. 

But what if Paytm Mall found a method to get sellers in the most cost-effective way? What if the sellers and their catalogues were delivered to it on a platter, through a simple integration?

Seems like a worthy bet. 

Google wants be relevant for commerce 

It seems like the success of the ONDC hinges on a couple of things.

1. How good the listings are when you search for product
    
2. How easy is it to make payments