ONDC: Greater Market Access for Assam Tea

Romesh K Puri, IES (Retd.), Digital, e Commerce & Trade Expert, The BORBHAG Group

Assam tea, a cornerstone of India's rich tea heritage, enters its bicentennial celebration amidst a changing landscape. E-commerce emerges as a vital avenue, propelled by platforms like Open Network for Digital Commerce (ONDC). As Assam tea makers adapt, ONDC promises fair access, wider markets, and empowered growers, fostering sustainability and prosperity.

The Indian tea industry which dates to the 18th century rightly boasts of a proud history of diverse flavours and significant contribution to the world tea market. Assam, the largest producer of tea in India, is celebrating a key milestone of reaching 200 years. Assam not only accounts for about 52% of the country's total tea production but also provides employment to more than a million people in the state.

Rise of eCommerce 

The onset of Covid -19 brought about a significant change in the art of doing business with retail and online sales getting traction as packaging and branding become an integral part of it. The business of tea was no exception. Assam tea growers who managed to adapt to the changing model of doing online business did meander through the tough times of Covid-19.

Post covid-19 eCommerce has transformed the ways of doing businesses by offering advantages for both businesses and consumers. On one hand the key benefits which every business aspires and gets by being in the eCommerce network include lower costs, global reach, streamlined operations with better insights to consumer behaviour, targeted marketing, round-the-clock availability and reduced rollout time for new products.

On the other hand, the benefits which a consumer appreciates include the convenience of shopping, wider selection, competitive prices, option to make an informed purchasing decision, faster shopping and timely delivery.

Platform Centric Model 

eCommerce landscape today is dominated by platform centric model implying that a single online platform acts as the central hub for all the transactions. The advocators of such models harp on the benefits of scalability and efficiency by offering a wide variety of products and services to a large customer base. Besides this convenience of choice and standardization of experience across different sellers are the other selling points which a platform centric model operator regularly voices. In this era of booming digitization online selling has made selling for products easier through online platforms, to a much wider consumer base (both domestic and international) with much more ease. However, the food for thought is, has this online selling helped the tea growers of Assam in boosting their finances?  

ONDC: Fair and Open Network

It is an accepted fact that Government initiatives and collaborations with non-profit organizations have certainly offered support to the tea growers for improved market access and fair pricing mechanisms which are crucial instruments for ensuring their sustainable economic well-being in the long run. However, the felt need is for an unparalleled success through much improved and wider market access. Is Open Network Digital Commerce (ONDC), a government backed initiative, an alternative worth exploring for the Tea growers of Assam?

A deeper dive into the platform centric model reveals that sellers onboarded by the platform have limited control over their brand identity, customer relationships and even pricing to some extent. The onboarding fee/commissions charged by the platform(s) are often on the higher side and this impacts the profit margins of the seller. Moreover, sellers’ visibility is limited to the buyer’s logging on to the relevant platform. To increase his visibility to a larger audience each seller must onboard onto several platforms which adds to his costs. The platform-centric model often portrays to have revolutionized e-commerce by offering convenience and efficiency for both buyers and sellers. However, the lack of control for sellers, potential for limited competition, and data privacy concerns seeded the need for a fair and balanced online marketplace for all stakeholders.

Open Network for Digital Commerce (ONDC) in one such initiative supported by the Government which is aimed to create a fair and open eCommerce ecosystem in the country. It is just like how UPI works for payments. ONDC connects buyers, sellers, and logistics providers seamlessly across different platforms, fostering competition and benefiting various stakeholders. The standardized protocols of ONDC for product listing, transactions and logistics ensure both transparency and fairness for all the participants of the network. It empowers the sellers to manage their own inventory, set their own prices, build their brand independently. It is a win-win situation for one and all while a seller gets wider audience and an opportunity to expand his business, a consumer gets much more choices and a seamless experience.

ONDC: Gateway for prosperity for Assam Tea

Open Network for Digital Commerce (ONDC) has the potential to significantly benefit the tea growers in Assam by providing them with a wider market outreach by connecting them to a wider customer base, enhance profit margins by reducing the need of onboarding on multiple eCommerce platforms. The seamless onboarding process of ONDC coupled with minimal entry requirements has the perfect recipe for tea growers to prosper, especially those having limited resources to participate on multiple online platforms. It is for Assam tea growers now to harness the power of ONDC to build a more sustainable and profitable future.

Also Read: Financial Boost for Tea Sector: 82% Increase in Assistance to Small Growers