ONDC: Paytm's ticket to e-commerce dominance!

Hey there,

In 2016, Paytm missed the UPI train, which cost them losing a market they created to PhonePe & Google Pay.

Now, they have another chance with ONDC, and this time they are taking it seriously.

Here is how PayTM is going to take over e-commerce with ONDC 🧵

First, here is some quick context: Paytm, is a super app well-known for its payment services.

With nearly 100 million users transacting monthly, it's already a big player.

And, recently, Vijay Shekhar Sharma, CEO of Paytm, made a bold announcement.

By 2025, they aim to bring 10 million merchants onto the ONDC network.

This is a huge promise and poses a significant challenge to leading e-commerce companies like Flipkart, Amazon, Meesho, and others who are yet to jump on the ONDC bandwagon.

So, why is this a huge deal for Paytm and ONDC? Let's break it down:

1/ Expanding E-commerce User Base:

Paytm is already seeing impressive results with ONDC. About 11.8 million customers have been directed to Paytm via ONDC.

Considering India's e-commerce market is the fastest growing globally and expected to reach 450 million users by 2027, Paytm's early move positions them well.

2/ Innovative Transaction Model:

ONDC's approach to transactions is quite unique. It deconstructs the transaction process, segmenting parts like the seller, logistics, and payment. This isn't just different; it's potentially more efficient.

By reducing the complexities of a traditional e-commerce setup, it offers consumers potentially better deals and services.

It offers individual players to do what they do best, in the case of Paytm, its payments.

3/ Rapid Transaction Growth:

The growth rate of transactions on ONDC is nothing short of spectacular. From about 1,200 in January to nearly 1.2 million in just a week last month, these numbers speak volumes.

It's clear evidence of an expanding user base and growing acceptance. For early birds like Paytm, this could mean a significant advantage in the long run.

4/ Nationwide Reach:

ONDC isn't just a big-city thing. Transactions are happening across 600 cities, showing its wide geographic reach. For Paytm, this means tapping into a diverse customer base, reaching into various regions, and even into smaller tier 3 and tier 4 cities.

If Paytm plays its cards right, stays true to its promises, and keeps up with its first-mover strategies, it could come out on top in the ONDC network.

✍️ Jargon of the day

ONDC - Open Network for Digital Commerce, is a new approach to online shopping in India. Think of it as a digital marketplace that connects buyers and sellers, but without being controlled by just one company.

Unlike traditional e-commerce where big companies like Amazon or Flipkart dominate, ONDC allows multiple sellers and platforms to come together. This way, small businesses can also reach customers easily without being overshadowed by the giants.

Loved this edition? Or have some thoughts to share? We'd love to hear from you

Cheers,
Karthik