Explainer: How is ONDC Beneficial for Homegrown and Local Brands?

India has, for a long time now, been dominated by various global e-commerce platforms for digital payments, also offering the local and the homegrown brands the medium to reach their consumers. However, ONDC (Open Network for Digital Commerce) is an Indian breakthrough offering the same services, with the aim of democratising digital commerce infrastructure.

The platform has been working to create an open network involving buyers and sellers, allowing functions like a UPI for transactions across different platforms offering goods and services.

As part of its functions, the platform has been providing consumers with more choices along with competitive pricing and a single checkout experience.

Similarly, homegrown and Indian local brands can also use the leverage extended by the network and benefit from the platform.

How can local brands benefit?

To reap the benefits of the platform, it is important to understand various roles and functions being offered to the local brands and here’s how to understand them.

Chances of larger access

As a local brand, getting listed on the ONDC means that the products will be showcased and also distributed on various buyer apps, which are connected to the platform. This can easily lead to increased chances of visibility of the products and reach the customers on all these buyer apps.

Benefits of the transaction costs

ONDC asks for lower commission rates compared to the other e-commerce platforms. As an emerging local brand, this can help small business owners to manage their investments and leave them with, comparatively, a higher portion of earnings and a better profit margin.

No rigid contracts and algorithms

The ONDC Network does not capture the sellers in restrictive and rigid contracts. Along with that, the products offered by the sellers are not excluded based on any technical biased algorithms or unfair competition practices.

Way to logistics service providers

The local brands listed with the ONDC are provided with third-party logistics providers that help them deliver the orders from the customers in a streamlined process with a faster system.

Important insights for the business

The ONDC network provides valuable feedback based on which important decisions can be taken by the brands. It offers clear insights into the market trends and customer feedback, to ensure a data-based decision and to improve scalability.

Data privacy

Ensuring data privacy, ONDC offers a smooth and transparent communication channel, however, making sure that the brands have complete control over their business data on the ONDC Network.

For the hyperlocal focus and the brands

With a more relevant service as per the local presence and the focus, the network further enhances the local loyalty and helps both customers and the brands to reach each other. Such a feature is well-suited especially for the brands in the niche segments with specific geographical locations.

Fostering invocation

One of the key benefits that the local brands can reap by associating with the ONDC network is that it allows the brands to be open to innovative preferences, as there are no restrictions or rules applicable to the platforms. This means that the local brands can also create personalised offerings along with flexible pricing.

Assistance and training

If any local brand is new to the industry or online selling, the ONDC also keeps collaborating with the government agencies and other industry entities to offer technical training and help. So, accessing resources is doubled with the necessary training, making the brands opt for the digital market.