India’s open e-commerce network expands to B2B transactions

The Indian government-backed open e-commerce network has been expanded to facilitate business-to-business (B2B) transactions — months after enabling transactions between consumers and merchants over the open network protocol and widening its reach to the mobility sector.

On Monday, the Open Network for Digital Commerce — commonly called ONDC — launched B2B transactions on its interoperable network. Rapidor, a business automation platform based in Kerala, and SignCatch, a SaaS payments startup based in New Delhi, have come on the network to start B2B transactions between them.

During the testing phase that began last month, both startups conducted about 160 cross-transactions on the open network. The ONDC team said it has some other startups in the pipeline for its B2B expansion, including Noida-based rural fintech company Spice Money.

“One of the biggest challenges in digital commerce is even if you help enterprises to digitize, how do we help them to reach across the market? Each of them has to have a separate buying application or a portal they use to call. So now, we are trying to create a standard, which will make all these things a big possibility,” said T Koshy, chief executive officer and managing director at ONDC, during the launch.

The Indian government established ONDC as a non-profit firm in 2021 to “democratize” digital commerce in the country — replicating the success of its interoperable mobile payments platform UPI which helped Google and Walmart to take on the competition from existing wallets that each leveraged their own closed ecosystem. The e-commerce network started its alpha testing in April last year and kicked off its beta version in September.

Koshy said the open e-commerce network was making about 50,000 daily transactions related to groceries and food deliveries. It expects to manage 100,000 daily transactions in the next few months.

ONDC expanded to the mobility sector in March by introducing the on-demand auto rickshaw booking app Namma Yatri on its network. It is also open to collaborate with Uber and Ola to further expand the network.

“B2B has its own nuances because the buyers are different, their priorities are different,” said Koshy. “A pure contractual relationship between the buyer and seller. Everything is different, and there will be some negotiation.”

The Indian government is quite bullish on making ONDC a mainstream system for digital commerce in the country. The government even recently warned e-commerce giants by saying it would have to “cut off those who are left behind” and urged them to join the initiative before it is “too late to join the train.”

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