Why Was ONDC Created?

India’s e-commerce market has grown rapidly over the past decade, but many small businesses continue to face challenges entering and competing within the digital economy. By eliminating the strict monopolies of giant platforms, this government-backed setup helps tech-enabled local businesses handle their digital commerce and inventory much more effectively. This network marks a massive step forward in the Future Of Digital Entrepreneurship In India, allowing rising creators and traditional merchants to lower their costs and build a highly successful, independent online selling presence.

High customer acquisition costs, marketplace commissions, algorithm-driven visibility, and dependence on a limited number of large platforms have created barriers for many retailers and emerging brands.

ONDC was introduced to address some of these structural challenges by promoting greater competition and improving market access.

According to the Official ONDC Portal, the initiative aims to democratise digital commerce by enabling buyers and sellers to transact regardless of the applications they use.

According to the official ONDC framework, the network is designed to encourage wider participation from MSMEs, retail stores, direct-to-consumer (D2C) brands, local service providers, restaurants, logistics companies, and technology platforms. By enabling these businesses to connect through a common digital infrastructure, ONDC aims to reduce dependence on closed marketplace ecosystems while creating a more competitive, inclusive, and interoperable digital commerce environment. 

How ONDC Works

One of the biggest misconceptions about ONDC is that businesses sell directly on the platform. In reality, ONDC is not a marketplace but an open digital network that connects buyers, sellers, logistics providers, and payment partners through common protocols.

Businesses join the network through ONDC-compatible seller apps, where they manage their product catalogues, inventory, and orders. Customers, meanwhile, use buyer apps to search for products. When a search is made, the request is shared across the network, allowing eligible sellers to appear in the results regardless of the platform they use.

This model separates product discovery from individual marketplaces, enabling businesses to reach customers across multiple applications without maintaining separate listings on each platform.

Why Startups Should Pay Attention to ONDC

For startups, customer acquisition is often one of the largest operating expenses.

Building brand awareness, generating traffic, and converting customers typically require substantial investment in advertising and marketplace promotions.

ONDC introduces a different possibility.

Because discovery happens across an open network, businesses may gain access to customers using multiple buyer applications instead of relying entirely on one marketplace’s ecosystem.

While success still depends on pricing, product quality, fulfilment, and customer experience, the network has the potential to improve discoverability for smaller brands that previously struggled to compete against larger sellers.

For startups looking to diversify their sales channels, ONDC can complement rather than replace existing marketplaces.

Instead of viewing ONDC as an alternative to Amazon, Flipkart, or independent websites, businesses may benefit from treating it as another customer acquisition channel within a broader omnichannel strategy.