India’s ecommerce market is a significant opportunity, with the country’s population being the world’s largest, yet its online commerce penetration is relatively low compared to other economies. 840 million consumers use smartphones, and half of the population is under the age of 25.
Government policymakers face the challenge of encouraging digital transformation while protecting small, physical mom-and-pop merchants, known as kiranas, which drive 75% of national consumer goods sales.
The Open Network for Digital Commerce is a governmental initiative that aims to help kirana merchants establish an online presence. Launched in 2021, it is an open-source commerce framework that connects apps, payment providers, and logistics companies through open standards and rules.
Unlike marketplaces such as Amazon India and Flipkart, this initiative enables kirana owners and independent merchants to engage in online commerce without locking them into a single marketplace. They can operate freely and reach a wider audience.
The initiative has gained traction across India, with local brands using it as an additional distribution channel. Foreign companies that comply with India’s rules can also access the seller app ecosystem, expanding their reach.
Apps on the network differ for sellers and buyers. Seller apps, such as Mystore, CostBo, and GoFrugal, enable merchants to list products, manage inventory, and fulfill orders. Buyer apps, including Paytm, Bajaj Finserve, and Magicpin, allow shoppers to browse and purchase products.
Selling fees range from 3-10%, which is lower than the 18-40% fees charged by marketplaces. Sellers also control their presence and approach with the infrastructure’s transparent algorithm, non-discriminatory sorting, and portable ratings, giving them more autonomy.
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To access the network, brands register with a seller app, and their products are immediately exposed to other apps. Shoppers on one buyer app can purchase goods from another, creating a seamless experience.
The network spans retailers, logistics service providers, restaurants, and hotels. Grocery, food delivery, and home and kitchen items are scaling faster due to higher order frequency, indicating a growing demand.
Foreign brands, including Red Bull, Unilever, and Nestle, are already on the network. Many global food brands on quick commerce platforms, such as Blinkit and Swiggy Instamart, also access the network at minimal cost, expanding their market reach.
For brands new to India, understanding the regulatory challenges is essential. The selling options, including marketplaces, distributors, D2C sites, and cross-border, are complex and require careful consideration to handle successfully.
As India’s ecommerce market continues to grow, the Open Network for Digital Commerce is likely to play a significant role in shaping the country’s digital commerce. With its open-source framework and low selling fees, it provides an attractive option for kirana merchants and brands looking to expand their online presence and increase their customer base.
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