ONDC Enables Market Access for Producer Groups
The Open Network for Digital Commerce (ONDC) is being used by producer organizations to scale beyond local markets. ONDC highlighted how collectives like Kirmaniya Fed are using the network to gain transparent market access, secure better pricing, and reach a national buyer base. The platform serves as a key channel for small, regional producers seeking to expand their distribution.
ONDC operates as an open, interoperable network rather than a centralized platform, a model often compared to UPI's impact on payments. This structure, built on an open-source Beckn protocol, allows sellers to list their products once and become discoverable across numerous buyer apps, effectively dismantling the walled gardens of traditional e-commerce giants. For sellers, this model drastically lowers the cost of doing business online, with commission fees on ONDC typically ranging from 3-5%, compared to the 15-30% charged by major marketplaces. This enables producer organizations and small businesses to retain higher profit margins while gaining access to a nationwide customer base and integrated logistics solutions crucial for serving Tier 2 and Tier 3 cities. The government is actively backing this shift, particularly for agricultural collectives. A central scheme aims to form and promote 10,000 Farmer Producer Organizations (FPOs) with financial assistance of up to ₹18 lakh per FPO over three years, plus credit guarantees and equity grants. As of early 2024, approximately 5,000 FPOs had been onboarded onto the ONDC network to sell produce directly to consumers across the country. The impact is tangible for early adopters. For example, KalpNil Naturals, a women-led enterprise selling cold-pressed oils, expanded its reach to over 44 cities and generated ₹2.5 lakhs in revenue in five months after joining ONDC, a direct result of eliminating costly intermediaries. Similarly, artisan-focused businesses like Craftizen Designs have generated sales of over ₹3.6 lakhs in a single quarter through the network. Despite its growth to over 1,200 cities and 7 lakh sellers by early 2025, ONDC's overall market penetration remains modest at 4.3% against the 83% share held by Flipkart and Amazon. Key challenges include low consumer awareness outside of metro areas and the technical learning curve for small, first-time digital sellers who need to manage catalog digitization and inventory syncing. The network unbundles the e-commerce value chain, separating seller-facing apps from buyer-facing apps and logistics providers. This allows different companies to innovate on each piece of the puzzle—from digital cataloging and inventory management for sellers in smaller towns to hyperlocal delivery solutions—creating a more competitive and specialized ecosystem.
