ONDC likely to increase digital consumption to $340 billion by 2030: Report

“India could exceed expectations for the growth and possibilities of digital commerce with ONDC. The network could evolve into a nerve centre of new connections, sparking continuous innovation and advances. However, there are multiple challenges to address to allow ONDC to scale and achieve greater momentum for success,” McKinsey’s report said.

The challenges include, the lack of digital ease, for both customers and sellers. The low trust factor, when compared with traditional shopping channels, was also a deterrent. Even fears of unsafe online commerce and unfavourable unit economics on platforms like these keep people away from transacting online, the report said.

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Some key findings:

■ Digital products and services consumption will be propelled from $60-$70 billion in FY22 to $320-$340 billion by FY30.

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■ ONDC will also help push up the number of digital transacting consumers by three to four times from 165-190 million to 450-500 million users during the same period.

■ Only around 6% of all micro, small and medium enterprises (MSMEs), actively sell on e-commerce platforms, which translates to around five to six million of them.

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■ Due to the propositions of ONDC, this base is likely to shoot up six to seven times to 30-40 million by FY30.

■ Small businesses from across sectors such as grocery, mobility, fashion and lifestyle, hospitality and others are likely to leverage the reach of ONDC, which aims to increase the penetration of e-commerce to 25%, from around 4-5% currently, in the next two years by reaching 900 million buyers and having 1.2 million sellers.

(Graphics & illustrations by Rahul Awasthi)