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Centre To Launch Trade Marketing Scheme to help Small Enterprises to Join ONDC

June 25, 2024
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The MSME Ministry has proposed the Trade Enablement & Marketing Scheme to help MSEs onboard ONDC. The MSEs will be provided subsidies via seller network participants to help cover costs for services like creating catalogues, managing accounts, packaging, and logistics. Earlier this year, ONDC also launched the Digi Ready Certifications (DRC) portal for the MSME sector by partnering with the Quality Council of India.

The Centre is reportedly looking to launch a new scheme to help micro and small enterprises (MSEs) join the Open Network for Digital Commerce (ONDC) and start selling their products online. The micro, small and medium enterprises (MSME) Ministry has proposed the Trade Enablement & Marketing (TEAM) scheme with a corpus of INR 277 Crs. to help MSEs expand their business operations beyond traditional physical stores by using ONDC. The report said that the initiative will help MSEs compete in the digital space at low costs, as they would not have to pay high commissions to online marketplaces. The Government is looking to support 5,00,000 MSEs under the scheme, expected to run till 2026-27.

The MSEs will be provided subsidies via seller network participants (SNPs) to help cover costs for services like creating catalogues, managing accounts, packaging, and logistics. SNPs help connect sellers to the ONDC network and provide services like creating product catalogue, managing accounts, and managing payments. Launched in 2021 under the aegis of the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC is an open protocol-based network to enable local commerce across multiple segments, including grocery, mobility, among others.

The network aims to democratize ecommerce by providing services at lower costs compared to other online marketplaces. The Indian ecommerce segment is currently dominated by behemoths like Amazon, Flipkart and Meesho. ONDC has been continuously expanding its services by entering new segments and onboarding new participants. As a result, it clocked a 23% month-on-month increase in the transaction on the platform in May.

It posted a record 89 Lakh transactions across retail and ride-hailing segments last month. Besides, it has taken a number of steps to onboard small businesses. In February this year, ONDC launched the Digi Ready Certifications (DRC) portal for the MSME sector by partnering with the Quality Council of India (QCI). The DRC portal helps MSMEs self-assess their preparedness to join the ONDC platform as sellers.

Last year, ONDC also partnered Meta to educate small businesses to build conversational buyer and seller experiences on WhatsApp through Meta’s business and technical solution providers. Amid all these, startups like Paytm, Ola, PhonePe, Meesho and Shiprocket have integrated some of their services with ONDC. At the heart of all these is the lucrative Indian ecommerce market, which is expected to clock a CAGR of 19% during 2022-2030 to reach a size of $400 Bn. by the end of this period.

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