In India, more than 12 million sellers earn a living by selling or reselling products and services – but, only 0.125% or 15,000 of these sellers, especially those in small towns and rural areas have enabled e-commerce.

For this reason, the Open Network for Digital Commerce (ONDC), a non-profit organization has the mission to increase e-commerce penetration in the country by enabling population-scale inclusion of all types and sizes of sellers.

According to a recent report by consulting firm McKinsey, the government-backed e-commerce project has the potential to increase India's digital consumption by a massive 5X to $340 billion by 2030. That's a huge jump from the current $60-$70 billion in digital products and services consumption in FY22.

The report also predicts that the ONDC will help push up the number of digital transacting consumers by 3-4X from 165-190 million to 450-500 million users during the same period.

However, the report also highlighted challenges that need to be addressed for the ONDC to gain greater momentum and success, including a lack of digital ease for customers and sellers, low trust compared to traditional shopping channels, and concerns about unsafe online commerce and unfavourable unit economics.

Despite these challenges, small businesses across various sectors such as grocery, mobility, fashion and lifestyle, are expected to benefit from the ONDC's reach. The ONDC could also expand to areas such as peer-to-peer homestay, direct-to-farmer sales, and even a building materials marketplace.

With its goal of increasing e-commerce penetration to 25% from the current 4-5% in the next two years by engaging 900 million buyers and 1.2 million sellers, the ONDC has the potential to transform digital commerce in India and unlock the country's vast market potential.