Redefining Customer Acquisition Cost in Open Network.

 

Whenever a new product or service is launched in the market, the product manager often plans for triggers like incentives, free samples and so on to act as a catalyst to stimulate product trials. When ecommerce companies launched their service, they took this idea to its next level. With a platform, based on proprietary protocol, the incentives became a tool not just to stimulate trials, but also to build a committed userbase of significant magnitude that it will be practically impossible for many competing platforms to evolve resulting in few walled gardens in each domain who eventually not in the best interest of the industry and economy.

Towards building these walled gardens, the early entrants blew billions of dollars. This was neither charity nor helping the merchants to establish themselves in the digital space. But with the idea of stifling competition which will help them to extract return on this investment through monopolistic / oligopolistic practices like rent- seeking.

This is not just an Indian phenomenon, but seen all around the around the world and the world is worried. The developed countries like USA and EU are attempting to address the challenges of this market concentration through regulation. America Innovation and Choice Online Act in USA and Digital Market Act of EU are attempts in this direction. The UK has also a bill (Digital Markets, Competition and Consumers Bill)  under consideration by the parliament.

We in India have now taken a bold step in resolving this conundrum through the power of technology and markets with enabling policy support. It is in this direction that ONDC has been established with a mandate to democratize commerce. In first two years since the ONDC was was incorporated, it has managed o achieve a merchant base of 450,000 with a daily transaction level of more than 250,000 transactions at less than one tenth of the cost of the other ecommerce players blew up in the same time period after they launched. 

More importantly, this removal of the stranglehold by the platform providers is ensuring that these efforts, initiatives and incentives are also from the collective of sellers, brand owners and buyer and seller NPs and not from the select group of platform providers who use this as a tool for market share concentration and not to help to expand the market. The participation is wide spread ranging from multinational giants like Google, Meta, HUL , ITC, McDonald, Dominos to Philanthropic Organizations like BMGF and Wadhwani Foundation, Government Departments like Agriculture, Fisheries, MSME etc . Each of these entities are figuring out and rolling out innovative interventions to help broad-basing of the market with participation from big and small enterprises alike. Advertisement and hoardings with “Buyer App”-agnostic ONDC QR codes is another powerful idea in the hands of merchants and brands.

Clickable PDFs and social media post taking the reader directly to the product to place and order and make a payment is an interesting innovation that agencies like SFAC have already attempted with demonstrable outcome. Many direct marketing companies are now evolving interesting solutions around this idea.

On the other hand, with ONDC enabling every catalogable products and services to be available in the network, diverse enterprises with large digital consumer base like media organizations, fintech etc. are also developing strategies to offer related products and services to their clients. Each of them with their loyalties primarily to their customers, will find innovative means (may be drawing the power of AI and ML) to help their customers what is relevant for them more. Foray into ONDC network by medial giant Dainik Jagran is a case in point which many others have initiated.

If you let your imagination run wild, you will be surprised at the possibilities for innovation exploding on your face which in the current platform centric model is unthinkable. Let me dare you to be innovative in this new paradigm.

“Without leaps of imagination or dreaming, we lose the excitement of possibilities. Dreaming, after all is a form of planning.” Gloria Steinem