ONDC's Growing Grip: What It Means for Your Local Kirana

The familiar sight of your neighborhood kirana store—with its hand-written inventory lists, personal credit systems, and the shop owner who knows your family's preferences—is undergoing a quiet revolution. The Open Network for Digital Commerce (ONDC) is slowly but surely transforming how these traditional retail pillars operate, compete, and survive in an increasingly digital marketplace.

The Numbers Tell a Story

India's retail landscape is dominated by approximately 12 million kirana stores, yet a staggering reality emerges from recent data: only 15,000 or 0.0125 percent are eCommerce enabled. This digital divide becomes even more pronounced when we consider that the share of kiranas in the grocery retail space will shrink to 70% over the next few years as consumers get used to the discounts, variety and shopping convenience offered by alternative grocery retailers.

However, ONDC's growth trajectory suggests a turning tide. The number of monthly transactions has increased from 1 million in early 2023 to 15 million-plus by the end of 2024, while more than 3 lakh sellers onboarded and more than 100 buyer applications involved, ONDC is currently operational in more than 400 cities and towns.

What ONDC Really Means for Kiranas

The Open Network for Digital Commerce isn't just another e-commerce platform—it's a fundamental reimagining of how digital commerce should work. ONDC is expected to be the next mass-scale technological disruption that will help break down digital monopolies by using open source networks and protocols.

For your local kirana, this translates into several concrete advantages:

Level Playing Field: ONDC breaks the monopoly of large platforms, offering equal opportunities for every seller—whether a neighbourhood Kirana store or an emerging D2C (direct-to-consumer) brand. Your corner shop can now compete with e-commerce giants without paying exorbitant commission fees or being buried in search results.

Enhanced Digital Capabilities: By leveraging ONDC, kirana stores can seamlessly integrate with digital platforms, offering competitive delivery options and utilising remote inventory to stay agile and meet evolving customer demands, effectively levelling the playing field against quick commerce giants.

Cost-Effective Digitization: Open Network for Digital Commerce will enable kirana and other small store owners to run digital storefronts at a minimal cost with wider logistics and inventory options.

The Transformation in Action

Real change is already happening on the ground. KiranaPro is set to launch its operation in Hyderabad and Thiruvananthapuram this month, followed by rapid expansion across Kerala and other cities nationwide. Even major corporations are joining the movement—Hindustan Unilever became the first fast-moving consumer goods (FMCG) company to join ONDC in 2022. They will also help onboard nearly 1.3 million Kirana stores on the platform.

What's particularly interesting is how this digital transformation is unfolding. The most sustainable digital transformation in traditional retail rarely involves sweeping changes or expensive systems. A recent 2024 study on Indonesia's mom-and-pop warung shops illustrates that successful digitisation tends to emerge from functional, low-cost adaptations.

Beyond Simple Digitization

The ONDC revolution isn't just about putting kiranas online—it's about preserving and enhancing what makes them special while giving them tools to compete in the modern marketplace. It influences local communities and employment dynamics while reshaping consumer behaviors and shopping patterns. Additionally, it holds significant economic implications for small-scale businesses, potentially altering the landscape of entrepreneurship in the country.

This transformation recognizes that kiranas aren't just retail outlets; they're community anchors. They provide credit to loyal customers, understand local preferences intimately, and offer the kind of personalized service that algorithms can't replicate. ONDC allows them to maintain these relationships while extending their reach and efficiency.

Challenges on the Horizon

However, the path forward isn't without obstacles. The approximately 12mn kiranas across India are far from homogeneous. Not only in terms of size and scale but also in terms of mindset towards doing business. This diversity means that ONDC adoption will vary significantly across different types of stores and regions.

Many kirana owners are still skeptical about digital platforms, having witnessed how earlier e-commerce models often marginalized traditional retailers. The success of ONDC will largely depend on whether it can demonstrate tangible benefits without disrupting the core business model that has kept kiranas viable for decades.

What This Means for You as a Consumer

As ONDC gains momentum, you might notice subtle changes in how your local kirana operates. Your shop owner might start offering home delivery through apps, maintain better inventory tracking, or provide more diverse product options through network partnerships. The personal touch that makes kiranas special should remain intact, but enhanced with digital convenience.

You might also find that your kirana becomes more competitive with pricing and variety, as ONDC enables them to access wholesale networks and inventory pools that were previously available only to larger retailers.

The Road Ahead

The ONDC experiment represents more than technological change—it's an attempt to create a more inclusive digital economy where traditional businesses can thrive alongside tech-enabled giants. This groundbreaking initiative introduced by the government, aimed at establishing a digital platform that fosters transparency and inclusivity for all stakeholders in the retail ecosystem.

For your local kirana, ONDC offers a lifeline in an increasingly digital world. It provides tools to compete without compromising the personal relationships and community connections that have always been their greatest strength. The question isn't whether kiranas will survive the digital revolution, but how successfully they'll adapt to lead it.

The growing grip of ONDC on India's retail landscape signals a future where your neighborhood kirana isn't just a relic of the past, but an evolved, digitally empowered community institution that combines the best of traditional retail with modern convenience. In this vision, technology serves not to replace human connections but to amplify them, ensuring that the corner shop remains a cornerstone of Indian commerce for generations to come.