The ONDC Wave: How Central India’s Startups Can Ride the Next E-commerce Revolution

What’s Happening: The Unbundling of E-commerce

At its core, ONDC is not an app or a website; it’s an open, interoperable network. Think of it as the ‘HTTP’ for e-commerce, allowing any buyer and seller to transact regardless of the specific platform they use. A customer on Paytm could seamlessly buy a product from a local artisan in Gwalior listed on a small, specialized seller app. This unbundling of the e-commerce value chain—discovery, ordering, fulfillment, and payment—is gaining significant momentum. The pilot phase, which notably included Bhopal, has expanded to over 80 cities. The network is fostering innovation by allowing different companies to specialize. For instance, one startup can build a best-in-class seller onboarding app, another can focus on hyperlocal logistics, and a third can create a unique buyer experience, all plugging into the same open network.

The government, through initiatives like Startup India and the Ministry of MSME, is actively promoting adoption. The MSME TEAM Initiative, for example, aims to assist five lakh MSMEs in onboarding to the ONDC platform, providing financial assistance for catalogue creation and digital readiness. This policy push is creating a fertile ground for startups that can provide the necessary tools and services—catalogue management, inventory syncing, and data analytics—to these newly digitized businesses. The vision is to move digital commerce penetration from its current single-digit percentage to a figure that mirrors more developed economies, unlocking a potential $80+ billion opportunity.

Why It Matters: A Paradigm Shift for Founders, Investors, and Mentors

The implications of ONDC are far-reaching for the entire startup ecosystem in Central India.

• For Founders: The most significant advantage is the drastic reduction in the cost of customer acquisition and the elimination of dependency on monolithic platforms. Startups no longer need to pay exorbitant commissions or fight biased algorithms for visibility. Instead, they can focus on their core value proposition—be it a unique product, a superior service, or an innovative tech solution. This opens doors for D2C brands in Indore’s burgeoning consumer goods sector, agri-tech startups in Bhopal looking for wider market access, and logistics-tech companies that can now offer services to a vast, unbundled network of sellers.
• For Investors: ONDC creates a new layer of investment opportunities. Rather than funding yet another marketplace, investors can back specialized ‘network participants’ that solve specific problems within the ecosystem. Think of startups building AI-powered analytics for ONDC sellers, fintech companies offering embedded finance solutions on the network, or SaaS platforms that simplify ONDC integration. The network’s success is a catalyst for a whole new generation of B2B and B2C startups.
• For Mentors: For mentors at TiE Indore, ONDC presents a new strategic playbook. The guidance shifts from ‘how to win on Amazon’ to ‘how to build a resilient, multi-channel strategy on an open network.’ Mentorship can focus on helping startups identify niche opportunities, build interoperable tech stacks, and forge strategic partnerships within the ONDC ecosystem. It’s about teaching founders to think in terms of protocols and networks, not just platforms.

How Startups Can Respond: An Actionable Framework for Central India

Startups in Madhya Pradesh should not view ONDC as a distant trend but as an immediate call to action. Here’s a structured approach to leveraging this opportunity:

The Local Lens: Grounding the ONDC Opportunity in Indore and Bhopal

Central India is uniquely positioned to capitalize on the ONDC wave. Indore, with its robust logistics hub at the Pithampur industrial corridor and a strong base of D2C brands, can become a major node for fulfillment and seller services. Startups operating out of the MPSEDC IT Park or Crystal IT Park can develop the core technologies to power these operations. Imagine a local D2C brand of poha or namkeen, traditionally limited by geography or high marketplace fees, now being discoverable to a buyer in Bengaluru or Mumbai through any ONDC-enabled buyer app. This is the power ONDC unlocks.

In Bhopal, the state capital and a pilot city for ONDC, the opportunity lies in governance tech and MSME enablement. Institutions like IIM Indore and IIT Indore can play a pivotal role by incubating startups focused on ONDC. Their research and talent pool can help solve complex challenges like dispute resolution, seller credit scoring, and supply chain optimization for the network. Incubators like AIC-PRESTIGE and co-working spaces like Workie can become the breeding grounds for the next generation of ONDC-first companies, creating a vibrant local ecosystem that contributes to this national digital infrastructure.

Takeaways: A TiE Mentoring Perspective

From a TiE perspective, ONDC is not just a technological shift; it’s a mindset shift. We mentor our startups to build moats and defensible business models. In the ONDC world, that moat is not built by locking in customers but by providing indispensable value within an open and competitive network. Our advice to founders is clear:

• Don’t Wait, Participate: The network is being built now. Early participants have the opportunity to shape its direction and establish themselves as key players. Start experimenting, even on a small scale.
• Solve for Trust: In a decentralized network, trust is paramount. Build solutions that enhance transparency, reliability, and security for both buyers and sellers. This could be through better seller verification, reliable delivery tracking, or fair dispute resolution mechanisms.
• Leverage Your Local Advantage: Understand the unique needs of Central India’s businesses and consumers. Build for them first. Your success in the local context will be the springboard for national scale.

The journey into this new paradigm can be daunting. That’s where the power of the TiE network comes in. Through our mentorship programs, we connect you with seasoned entrepreneurs and industry experts who can provide the guidance and connections needed to navigate this evolving landscape. We encourage you to become a part of our community and build the future of commerce together.