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ONDC partners with Meta to enable better buyer and seller experiences on WhatsApp

ONDC is a digital project by the Indian government to develop a UPI-like architecture for the e-commerce industry, essentially to unbundle the seller side of the ecommerce marketplace ecosystem from the buyer side.

Meta and the e-commerce protocol Open Network for Digital Commerce (ONDC) announced that they are partnering together to help small businesses build conversational buyer and seller experiences on WhatsApp. Based on a press release reviewed by MediaNama, Meta will provide these small businesses with access to its ecosystem of business and technical solution providers and ONDC will enable these business/technical solution providers to become seller apps, bringing the businesses they service onto the ONDC Network. As a part of this partnership, Meta says that its Small Business Academy will digitally upskill five lakh micro, small and medium enterprises (MSMEs). Meta will also support Sahayak, ONDC’s WhatsApp chatbot, making it the single point of seller and customer communication for ONDC.

ONDC is a digital project by the Indian government to develop a UPI-like architecture for the e-commerce industry, essentially to unbundle the seller side of the ecommerce marketplace ecosystem from the buyer side, in order to address seller-side monopolisation. The ONDC network consists of participants from various domains ranging from retail, logistics service providers, restaurants, hotels, etc, who join ONDC as buyer-side apps, seller-side apps, or gateways. Think of it this way: for users, it is a service that shows you products across multiple e-commerce platforms. For sellers, it is a service that allows them to list on multiple e-commerce platforms and choose logistics and payment services independent of these platforms. ONDC is currently operational in more than 500 cities and towns across India and has plans to expand cross-country, the Ministry of Commerce and Industry recently said in response to a parliamentary question. It plans to give “special attention” and “provide handholding” to undigitized sellers, the ministry said, which could potentially explain its partnership with Meta.

Meta’s dive into the e-commerce space

This isn’t the first time that Meta has forayed into e-commerce. In 2020, Meta invested $5.7 billion in Jio Platforms in April 2020 for a 9.99 percent stake. According to a Moneycontrol report, this investment was accompanied by a commercial partnership between Jio Platforms, Reliance Retail, and WhatsApp. Then, in 2022, Meta and Reliance Jio partnered on JioMart—Reliance Jio’s online grocery venture. Through this partnership, Reliance said, users will be able to “browse through JioMart’s entire grocery catalog, add items to cart, and make the payment to complete the purchase – all without leaving the WhatsApp chat.”

Meta’s strategic partnerships with JioMart and ONDC could mark the first few steps of WhatsApp’s transition into a super app like China’s WeChat.

Nikhil’s take

As a business, the tricky part of working with an entity like ONDC is that the Indian government can do you what it did to the UPI (digital payments) ecosystem: make some business models redundant. In case of UPI, the Indian government passed a regulation to remove a platform fee, that was a primary means to monetization for platforms. This furthered consolidation in the UPI market (only those who were willing to lose money enabling transactions have remained), and left players scrambling for other means of monetization. It’s not clear how Meta will make money via this partnership, and it could be that it is willing to use this to make WhatsApp more useful for its customer, as well as onboard businesses for WhatsApp for business, and will find other means of monetization. This is also what WhatsApp’s partnership with JioMart was supposed to do. The JioMart catalog and bot was launched last year on WhatsApp, though it’s not clear whether a $5.7 billion investment for shopping bot has been an adequate return on investment for Meta.

Other ONDC partnerships:

Google has also recently annouced a partnership with ONDC, stating that it is helping the e-commerce protocol in digitizing public transport at scale. Google Maps will collaborate with the ONDC-enabled auto-hailing service Namma Yatri with a focus on bringing metro schedules and bookings to users. “By mid next year, we’ll launch Kochi metro on Google Maps powered by Namma Yatri, and follow with other metros as they join the ONDC network,” Google said in its blog post discussing the partnership.

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