Snapdeal starts taking orders on ONDC, sees demand for smaller cities

Company says it's only e-commerce platform to fintegrate its buyer and seller platforms on platform

E-commerce firm Snapdeal said on Tuesday it has started receiving orders through the Open Network for Digital Commerce (ONDC), the non-profit company set up by the government as an alternative for internet shopping.

Snapdeal made its debut on ONDC in July last year and it was fully integrated earlier this month. It is the only e-commerce firm in India to fully integrate its buyer and seller platforms onto ONDC. Amazon announced in February that it will integrate its logistics network with ONDC. eKart, the logistics arm of e-commerce giant Flipkart, is on ONDC.

“With over a decade of experience serving Bharat through lakhs of small and medium enterprises, Snapdeal has a unique and deep understanding of what it takes to serve India’s mass market,” said Himanshu Chakrawarti, chief executive officer (CEO) of Snapdeal Market Place, referring to an alternative name for India.

“As we go live on ONDC, we would like to reiterate our belief that enabling India’s existing retail players, especially MSMEs, to embrace the online opportunity is the best way for India to reap the digital dividend for the largest section of society,” he said.

Snapdeal said early orders through ONDC were from Ajmer, Gurdaspur, Aligarh, Indore, Kakinada, Amravati and other cities. Most orders are for home and kitchen products like bed sheets, towels, utensils, storage and serving sets.

Customers using ONDC can access Snapdeal’s catalogue of home and kitchen products. Snapdeal is also expanding access to its fashion, beauty and personal care categories on the network.

“When a customer shops on a conventional e-commerce platform, they are accessing the front-end buyer application, be it through an iOS and android device. The application is built by the e-commerce firm itself. Once you select an item you would like to purchase, the entire back-end process of placing the order and making sure it is fulfilled, is tied to the e-commerce firm itself,” Girish Koppad, Vice President, Engineering, Snapdeal, told Business Standard.

“ONDC aims to decentralize this process. It allows any app that a customer might use regularly to become the buyer application. If a customer uses a payment app regularly, that platform can become the buyer app for ONDC, after which e-commerce marketplaces have the ability to list their sellers on the Network,” he explained.

ONDC’s decentralization allows for the logistics side of the order to also be democratized. Both Amazon as well as Flipkart currently offer their logistics services to ONDC.

“The customer can choose which logistics channel they prefer, if the sellers allow for that distinction. The seller can also fulfil the order themselves. If sellers do not have that fulfilment capability, they can allow customers to choose from the available logistics partners,” Koppad said.

Snapdeal uses third-party logistics services to deliver its regular orders. However, for orders coming through ONDC, the company itself is providing end-to-end logistics.

“Based on catalogue requirements of the ONDC platform, we picked the products to list on the Network. We have now registered all those sellers on the ONDC platform,” Koppad said.

T Koshy, CEO of ONDC, said, “We’re excited to have Snapdeal join the ONDC network with its repertoire of merchants from across the country with a special focus on MSME among others. This is in line with the inclusive agenda of ONDC providing equal opportunities for big and small enterprises.”

ONDC’s focus on creating an inclusive e-commerce ecosystem matches Snapdeal’s focus on growing business beyond brands and urban users, said the private company. Snapdeal said it is the only e-commerce platform in India to focus on the value segment.

Value e-commerce essentially refers to offering users quality merchandise at affordable prices. In most cases the price range for value products is below Rs 1,000.

According to Unicommerce, a cloud-based e-commerce enabler, e-commerce growth in India has moved beyond the large cities to Tier 2 and beyond regions. The market share of tier 2 and tier 3 cities in 2022 was 41.5 per cent and 21.4 per cent.