ONDC: Empowering Electronics Industry with Digital Commerce

‍

Electronics Consumer electronics is a popular segment for digital commerce, with 32 to 34 percent of transactions conducted online. The $75 billion market (FY22) could double to reach $150 billion by 2030, especially if the untapped potential for digital commerce is unlocked. Changing this could unleash an exciting new wave of growth. With ONDC, digital commerce could give retailers in small cities and towns wider reach across all consumers for sale of electronic goods in India.

‍

The consumer electronics sector in India has been growing steadily. As an example, India has the world’s second-largest smartphone market (after China), with approximately 600 million smartphone users. India’s consumer electronics market is expected to double from about $75 billion in fiscal year 2022 to more than $150 billion by fiscal year 2030 (Exhibit 1). 

‍

Much of the projected growth is expected to come from digital commerce and from modern retail players. These two segments are projected to grow at a CAGR of 12 to 14 percent until fiscal year 2030, far outpacing general trade’s growth of approximately 2 percent.

‍

01. Catalyse D2C for Brands

Four Considerations to Shape Digital Commerce in the Electronics Sector Buyer apps stand to gain significant advantages through well-executed marketing strategies that leverage social media to activate their existing user base. Additionally, financing partners on the network can alleviate financial constraints for consumers by offering flexible payment options for high-ticket items.

02. Digitalise the Inventory

Seller apps operating on the network have the potential to spearhead the digitalization initiative, especially in the general trade segment. To harness the digital growth momentum, seller apps could initially target established modern retail stores in urban areas to build credibility. Subsequently, they can attract smaller mom-and-pop stores to join their platform.

03. Build a Support Ecosystem for Resellers and New Sellers

Establishing trust is crucial for first-time sellers and resellers, particularly in terms of product quality and pricing. To facilitate this, low-cost technology service providers on the network can play a pivotal role by certifying the seller's products on pricing and quality, helping build credibility.

04. Develop Robust Logistics Capabilities

Sellers face the challenge of ensuring secure, safe delivery of high-value goods over long distances while minimizing the risk of product damage or fraud. Brands can address this challenge by utilizing their existing store infrastructure and providing local inventory from nearby stores. Video interactions among sellers, logistics providers, and consumers can enhance communication and transparency during the delivery process. Financial services players can contribute by offering micro-insurance products integrated with delivery services, providing additional protection to both sellers and consumers.

Getting on board with ONDC

The National Digital Commerce (NDC) initiative holds the transformative potential to establish open, inclusive, and competitive marketplaces in the virtual realm. As companies contemplate venturing into this space, a judicious evaluation of available options becomes paramount. This strategic scrutiny enables the identification of plays that not only align with their objectives but also maximize benefits from the vast opportunities facilitated by the open network.

In navigating the landscape ONDC offers, company leaders are advised to explore possibilities under two overarching themes. Firstly, a discerning analysis can determine use cases with the potential for rapid scalability and those that may yield results over a more extended timeframe. Secondly, leaders should assess where their organization is best positioned to engage. This evaluation, viewed through the prisms of market opportunity, internal capabilities, and the feasibility of investing in specific use cases, aids in making informed decisions.

By adopting this dual-focused approach, companies can strategically align their investments with organizational objectives, ensuring relevance and effectiveness. The exploration of use cases and strategic positioning within the ONDC framework becomes a dynamic tool for companies seeking to leverage the initiative for achieving their overarching strategic goals

‍