For years, selling online in India has meant playing by one company’s rules: pick a platform, accept its commission, follow its ranking algorithm, and hope your listing doesn’t get buried. That’s starting to change, thanks to a government-backed initiative most retailers have heard of, but few fully understand: ONDC.
If you run a supermarket, kirana store, or small retail business and you’re wondering whether ONDC is worth your time, here’s a clear, no-jargon breakdown of what it is, how it works, and whether it belongs in your online selling strategy.
What Is ONDC?
ONDC stands for Open Network for Digital Commerce. It’s an initiative by India’s Department for Promotion of Industry and Internal Trade (DPIIT), launched in 2021, built to make e-commerce work more like UPI works for payments – open, interoperable, and not owned by any single company.
Here’s the simplest way to picture it: today, if you’re on Amazon, you can only be found by people using the Amazon app. If you’re on Meesho, only Meesho users see you. ONDC breaks that wall down. It’s not a marketplace app itself – it’s a shared network, or protocol, that different buyer apps and seller apps plug into. A shopper browsing on Paytm, PhonePe, or any other ONDC-linked buyer app can discover and order from a seller listed through a completely different seller app, the same way you can send money from a Google Pay account to someone using PhonePe.
Why Was ONDC Created?
The core problem ONDC set out to solve is concentration. Two or three large platforms have effectively controlled who gets seen online, what commission sellers pay, and how search rankings work, leaving small retailers with little leverage. Concerns have also been raised about heavy discounting and the difficulty new or small sellers face competing against players with years of scale behind them.
The government’s answer was to build public digital infrastructure for commerce, the same philosophy behind UPI: an open layer that anyone – a large platform, a startup, or an individual kirana store – can build on top of, without asking permission from a gatekeeper.
How Is It Different from Traditional Marketplaces?
The difference comes down to structure, not just size.
Traditional marketplaces (Amazon, Flipkart, Meesho) are closed ecosystems. The platform owns the buyer relationship, sets the commission, controls the ranking algorithm, and requires sellers to operate entirely within its rules and interface.
ONDC is a protocol, not a platform. It doesn’t own buyers or sellers. Instead, it connects independent “buyer-side apps” (where shoppers browse) with independent “seller-side apps” (where retailers list their inventory). A retailer can be listed once and become discoverable across multiple buyer apps simultaneously, rather than building a separate presence on each one.
In practice, this also means retailers aren’t locked into a single provider’s commission and policy structure. Since no single company owns the whole chain, competition is expected to happen on service and price rather than one platform dictating the terms for everyone.
How Can Small Retailers Benefit?
For a Kirana store or small supermarket, ONDC’s appeal is practical:
- Lower customer acquisition cost. Instead of spending on ads to be seen on one app, a single listing can appear across many buyer apps at once.
- No single point of lock-in. If one seller app raises fees or changes policy, a retailer isn’t stuck – they can shift to another seller app on the same network.
- A path for hyperlocal reach. ONDC has expanded well beyond metro cities, and government-backed reporting shows it has been specifically pitched at bringing small and Tier III/IV town traders online, rather than just big-city sellers.
- Room to compete on service, not just discounting. Because the network doesn’t force a single ranking algorithm on everyone, sellers have a genuine chance to win on delivery speed, freshness, and local trust – the things a neighbourhood store is already good at.
Adoption figures back up the “small seller” framing: reporting on ONDC’s seller base has repeatedly noted that a large majority of sellers onboarded are small and medium businesses, and the network has specifically targeted traders in smaller towns and rural belts as a growth priority.
That said, benefit doesn’t happen automatically just by signing up. The retailers seeing real results are the ones treating their ONDC listing the way they’d treat any storefront: accurate stock, fast confirmation, and billing that doesn’t fall apart the moment orders start coming from three different apps at once.
ONDC vs Amazon / Flipkart
| ONDC | Amazon / Flipkart | |
|---|---|---|
| Structure | Open network/protocol connecting many apps | Closed, single-owner platform |
| Discoverability | Listed once, visible across multiple buyer apps | Visible only within that platform’s app |
| Commission model | Varies by seller app; generally lower, no single fixed rate | Platform-set commission, often higher for smaller categories |
| Ranking control | No single algorithm owner; competition on service | Platform controls search ranking and ad placement |
| Scale (2026) | Growing, several lakh sellers onboarded, still smaller transaction volume than the big two | Established, tens of millions of active buyers |
| Best suited for | Local/regional retailers wanting low-cost, low-lock-in reach | Sellers wanting maximum existing traffic and fulfilment infrastructure |
The honest picture: Amazon and Flipkart still move far more volume today. ONDC’s transaction numbers have grown quickly off a small base, but they remain modest next to the established giants. The trade-off for a small retailer is reach-and-scale today versus lower cost and more independence over time.
Challenges of Selling Through ONDC
ONDC isn’t a guaranteed win, and it’s worth going in clear-eyed about the friction points:
- Uneven buyer adoption. Consumer surveys have found only a small share of online shoppers have placed an order through ONDC so far, and some who tried found the experience less smooth than expected.
- Onboarded doesn’t mean active. There’s a meaningful gap between sellers registered on ONDC and sellers transacting regularly on it.
- Fragmented experience. Different seller and buyer apps are built by different companies, so quality, design, and support vary a lot from one app to another.
- Learning curve. Choosing the right seller app and syncing inventory across a network takes more setup than joining one familiar platform.
- Billing and reconciliation complexity. Orders can arrive through several buyer apps at once, so a retailer’s billing and stock system needs to keep up, or overselling becomes a real risk.
Is ONDC the Future of Retail in India?
It’s fair to call ONDC a serious, government-backed bet, that’s grown from a few hundred sellers in 2023 to several lakh today, and expanded into food delivery, mobility, and even B2B trade. Whether it becomes the dominant way Indians shop, or simply a meaningful third option alongside Amazon and Flipkart, is still an open question. What’s clear is that it’s no longer just a pilot – it’s a live, functioning part of India’s digital commerce landscape, and one small retailer can start exploring at very low cost.
For a small retailer, the practical takeaway isn’t “abandon your existing channels for ONDC.” It’s this: the walls between marketplaces are coming down, and the retailers who’ll benefit most are the ones with clean, well-organized billing and inventory systems ready to handle orders arriving from more than one direction at once.
Preparing Your Retail Business for What’s Next
ONDC is a reminder that retail is becoming more connected, flexible, and technology driven. Whether you choose to sell through ONDC, traditional marketplaces, or your own storefront, the fundamentals remain the same – accurate inventory, seamless billing, and efficient day-to-day operations is what enables businesses to scale confidently.
As retailers explore new ways to reach customers, having the right retail management systems in place can make adapting to these changes significantly easier.
Want to simplify retail operations and stay ready for what’s next? Discover how Elixir Retail360 helps modern retailers manage billing, inventory, and multi-channel operations – all from a single platform.
