Automotive Retail: Art of the possible with ONDC

I was reading about ONDC (Open network for digital commerce) over the weekend and it got me thinking about how it might transform Indian automotive retail and its participants. And as I started thinking about it, I thought I might as well write it down and share it with my network to feed more dialogue. 

I learned about ONDC by reading this good paper from www.medianama.com https://www.medianama.com/wp-content/uploads/2022/03/ONDCStrategyPaper.pdf

As the paper suggests, ONDC is a paradigm shift from an operator-driven monolithic platform-centric model, to a facilitator-driven, interoperable decentralized network. If you don't have time to read the paper, I will summarize it below. 

The open network APIs provide the following essential benefits 

1. Inclusion of unregulated, micro, small and medium enterprises in the digital commerce ecosystem will enable better discoverability of their products and services provided by them, at a hyper-local and national level. At a significantly lesser platform commission and logistics cost. 

2. Reduced concentration risk for the buyer and seller from the large private e-commerce platforms. 

3. More choice for the buyer and better value for the money spent, for transactions done in the digital commerce ecosystem

4. open protocols, and interoperability, will bring transparency, fair business practices, and significant reach 

So the key question is how does ONDC expected to impact participants in Indian automotive retail. I am listing some broad strokes

Sellers 

1. reduced concentration risk (on discoverability) on new and pre-owned Bike comparison platforms, and automobile finance aggregator platforms. I consciously wrote "discoverability" since most aggregator platforms today influence bike customers with the upper/middle sales funnel but don't close the sale. Even now, Bike sale is predominantly thru the dealer-channel 

2. I expect OEMs, distributors as well as dealers to onboard the ONDC platform as sellers and partner with an open network of financers, logistics partners, etc. to improve their discoverability and ability to fulfill D2C demand at lesser cost and better speed. 

3. I expect lakhs of unregulated pre-owned bike sellers to onboard the platform and partner with an open network of evaluators/inspectors (lakhs of your neighborhood private-garage mechanics) and large/micro financers; to compete with regulated platforms like OLX, Spinny.com, cars24.com etc. 

4. I do expect lakhs of small/micro spare parts retailers to onboard ONDC not just as a seller but also as a buyer

5. Finally, I do expect existing commerce and discoverability platform aggregators to onboard the platform too. They wouldn't want to miss out on the benefits of the ecosystem themselves 

Buyers 

1. Individual buyers of new vehicles will have more product choices and better price transparency. I do hope that buyers of used vehicles will have better product quality transparency from the open network of sellers and evaluators. 

2. Multi-brand small retail buyers (bikes, spares, accessories) will have better price and product quality transparency from the distributors. I do expect that the open platform APIs on mobile Apps will accelerate the multi-brand outlet's network growth across the country. It will also accelerate their ability to fulfil hyper-local D2C demand 

In summary, ONDC's promise and potential in transformational, and I believe that it will uncover win-win growth opportunities for participants of all sizes and shapes in the automotive retail network. I think all they need to do is to keep their eyes open (don't get arrogant), onboard, and participate in this open network. 

I do think there are going to be challenges along the way (like UPI) but the wins will be far greater for us to worry about challenges today.