STARTUP-STORIES
Open Network for Digital Commerce (ONDC) Eyes Media Platforms for E-commerce Expansion
SUMMARY
ONDC, aiming to democratize e-commerce in India, is looking to integrate news media platforms. They propose that media houses can go beyond advertising and directly facilitate e-commerce transactions on their platforms, generating revenue from demand generation. This aligns with news platforms' fight against tech giants like Google and Meta for ad revenue dominance.
ONDC sees media platforms as a strategic way to expand its user base, particularly considering the projected growth of online media users in India (500 million by 2026). This aligns with ONDC's goal of reaching a GMV of $250-300 billion by 2030. ONDC's continuous addition of new offerings and partners across e-commerce, mobility, fintech, and agritech strengthens its position as a comprehensive digital commerce platform.
The Open Network for Digital Commerce (ONDC), a government-backed initiative aiming to democratize e-commerce in India, is exploring new avenues for growth. According to a report by Moneycontrol, ONDC is in advanced talks with news media platforms, including the digital arm of Dainik Jagran, for potential integration.
ONDC's Proposition to Media Houses
The core idea behind ONDC's outreach to media platforms is to create a value proposition beyond traditional advertising. The memo circulated by ONDC reportedly highlights the potential for media houses to directly facilitate e-commerce transactions on their platforms. This would allow them to move beyond advertising revenue and tap into the lucrative realm of demand generation.
Benefits for News Platforms
ONDC argues that relying solely on advertising and affiliate marketing distances media platforms from the most valuable aspect of the e-commerce cycle - the transaction itself. This current model, according to ONDC, limits media platforms' ability to customize offerings and charge competitive fees.
Context: News Platforms vs. Tech Giants
The timing of this initiative is noteworthy, considering the ongoing friction between news platforms and tech giants like Google and Meta. Indian publishers have accused these tech companies of dominating the news aggregation space, leading to a decline in advertising revenue for traditional media houses. An antitrust case against Google regarding this issue is currently under review by the Competition Commission of India (CCI).
Strategic Advantages for ONDC
Onboarding news media platforms presents a strategic opportunity for ONDC. This move would not only attract new participants to the network but also potentially expand the user base. A report by EY-FICCI predicts India's online media space to reach 500 million consumers by 2026, a significant market segment ONDC seeks to capitalize on.
ONDC's Growth Trajectory
This initiative aligns with ONDC's continuous efforts to expand its network and offerings. The platform already boasts listings across e-commerce, mobility, fintech, and agritech sectors. With this diversification, ONDC aims to reach a GMV (gross merchandise value) of $250-300 billion by 2030. Recent additions to the network include ride-hailing giant Ola and Kochi Metro Rail, further solidifying ONDC's position as a comprehensive digital commerce platform.
ONDC's outreach to media companies signifies a significant step towards its goal of democratizing e-commerce in India. By offering a compelling value proposition and capitalizing on growing online media consumption, ONDC is poised to become a major player in the Indian digital commerce landscape. As the platform integrates more diverse participants, the benefits for both consumers and businesses are likely to increase.