ONDC&#8217;s &#8216;UPI Moment&#8217; for E-Commerce Has Arrived
Indian commerce minister Piyush Goyal recently criticised e-commerce platforms like Amazon for using predatory pricing strategies, warning that such practices could harm local businesses and the Indian economy. The minister’s statement plays in favour of Bhavish Aggarwal, who recently announced his grand plan to disrupt the Indian e-commerce ecosystem. Aggarwal supported Goyal, saying, “At Ola, we’re building the future of commerce with ONDC, which will enable kiranas and small merchants to reach consumers through digital networks. ONDC is the future.” This comes after he declared ONDC “the UPI moment for e-commerce” at the recent Ola Sankalp 2024 event. At the same event, he also announced that the company would change its name from Ola Cabs to Ola Consumer, as it expands its services beyond cabs. “We are going to offer a much broader suite of consumer services. Many of you have already used some of these. As I said, our ambition is to truly make commerce accessible, affordable, and efficient,” said Aggarwal. For the same, Ola Consumer is integrating with ONDC to reduce the cost of commerce and expand service categories. Currently, Ola users can order food and beverages via ONDC through the Ola app, with plans to expand to groceries and fashion items. The company has also integrated a food delivery plugin within its app, enabling users to access a variety of restaurants and food brands listed on ONDC. This feature is in the pilot phase, available to Ola employees and a select group of consumers. Aggarwal also plans to leverage the power of ONDC to take on the likes of Zepto and Blinkit. The company plans to implement fully automated dark stores and fulfilment centres to revolutionise warehousing and improve the commerce supply chain. In addition, Ola is focusing on sustainable logistics by electrifying its delivery operations, which is expected to reduce logistics costs by about 50% and create additional jobs. Can AI Help ONDC Achieve Its UPI Moment? To make it easier for customers to buy products and improve discoverability for sellers, Ola has also introduced an AI shopping co-pilot on ONDC. “Your shopping experience on digital platforms is not linear and static. Imagine if there were an AI co-pilot guiding you along the way, personalising things, talking to you, and understanding your needs in real-time,” said Aggarwal. Several major companies have joined ONDC to expand their market reach. These include Hindustan Unilever, ITC, Nestlé, PepsiCo, Dabur India, Godrej Consumer Products, Marico, and Tata Chemicals. Interestingly, Ola is not the only company banking on AI to turn ONDC into India’s e-commerce giant. Likewise, other contributors are pushing the boundaries of AI on ONDC. Plotch.ai, a Google-backed startup is also currently working with ONDC to build AI infrastructure and simplify e-commerce for consumers. The company has developed an AI-powered conversational commerce app featuring multilingual, voice-enabled semantic search and robust image search capabilities. “Multilingual voice-based conversational commerce is one piece of the AI that we’re building,” said Manoj Gupta, the founder of Plotch.ai, in an exclusive interview with AIM. “For instance, if you’re looking to buy a saree, jewellery, or a T-shirt and want to find the most affordable options, you can simply ask the AI, and it will sort them for you,” he explained. Recently, another Indian startup Sarvam AI recently introduced voice-based AI agents. The cost of these agents starts at just one rupee per minute. According to co-founder Vivek Raghavan, enterprises can integrate these agents into their workflow without much hassle. “These are going to be voice-based, multilingual agents designed to solve specific business problems. They will be available in three channels – telephony, WhatsApp, or inside an app,” Raghavan told AIM in an interaction prior to the event. These agents could be integrated into contact centres and used for various applications across multiple industries, including insurance, food and grocery delivery, e-commerce, ride-hailing services, and even banking and payment apps. Raghavan further told AIM that Sarvam AI is working closely with Beckn Protocol, the underlying layer behind ONDC. ONDC Is a Baby, Let it Grow “ONDC is a very young, small baby, so we should let it grow. And I’m pretty sure that by 2030, we will see 100 million to 200 million transactions happening a month,” said Pramod Varma, former chief architect of Aadhaar, in an exclusive interview with AIM, when asked why ONDC is not seeing UPI-like success. “ONDC is much broader. On ONDC, you will see taxi bookings happening through Yatri, metro ticketing being integrated, and physical goods like grocery commerce being added. Food delivery is also starting to kick in. So, it’s what’s called multi-sectoral commerce. It does take a little more complexity to unravel,” explained Varma. ONDC logged a 21% month-on-month growth in transactions to 12 million in July 2024, compared to 10 million a month ago. Nationwide, ONDC handles 60,000 food orders daily, capturing 3% of the total order volumes managed by Swiggy and Zomato across India. ONDC is also set to integrate nearly all metro services into its network by next year, according to MD and CEO Thampy Koshy. Currently, India has a operational metro network spanning 905 kilometres across over 20 cities, with the Kochi and Chennai metros already partnering with ONDC to offer ticketing services through platforms like Namma Yatri, Rapido, and redBus. Koshy said, “We are talking to every metro to become ONDC participants. Some of the talks are in an advanced stage. By the end of the coming year, all metros are likely to be part of ONDC.”
To make it easier for customers to buy products and improve discoverability for sellers, Ola has also introduced an AI shopping co-pilot on ONDC.
Bhavish Aggarwal said, “At Ola, we’re building the future of commerce with ONDC, which will enable kiranas and small merchants to reach consumers through digital networks. ONDC is the future.”
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["AI", "Aim", "RAG", "semantic search", "R", "Go", "Git", "API", "startup", "AI agents"]
Siddharth is a media graduate who loves to explore tech through journalism and putting forward ideas worth pondering about in the era of artificial intelligence.