ONDC’s Retail Traction Is Slowing – What Needs Rethinking

In recent weeks, ONDC has faced growing scrutiny. ONDC’s own data reveal a notable slowdown in retail traction. At the same time, a consumer survey by LocalCircles highlights persistent concerns around user experience and customer support. While these challenges are real, they are not unexpected in a bold, system-wide transformation like ONDC. As someone who believes deeply in the potential of shared digital infrastructure to democratize commerce, I see this moment not as a setback, but as an opportunity. This post aims to spotlight specific design, coordination, and trust-related issues—particularly those that arise from the interdependent nature of the network—and to encourage deeper reflection across the ecosystem on what needs rethinking to make retail thrive on ONDC.

India’s Open Network for Digital Commerce (ONDC) was envisioned to revolutionize e-commerce by shifting power away from platform monopolies toward an open, interoperable digital network. Launched in late 2022 and entering a rapid scaling phase by mid-2023, ONDC aimed to level the playing field for small retailers and expand consumer choice. However, just a year into this journey, the early momentum in the retail segment appears to be stalling—raising important questions about what needs to evolve for sustained success.

Let’s start with what the numbers are telling us.

Retail Orders Decline Sharply

According to recent reports:

• Retail orders on ONDC dropped from 6.5 million in October 2024 to just 4.6 million by February 2025—a nearly 30% decline in four months.
• Retail’s contribution to overall ONDC transactions also shrank—from 53% in May 2024 to 31% in February 2025.

This downturn comes amid the phasing out of financial incentives. Some experts have linked the fall in transactions to the phasing out of financial incentives that was subsiding transactions on the platform. 

But is that the only reason? Not quite.

While incentives have probably played a catalytic role, there are underlying design and experience issues with how ONDC buyer and seller apps are currently structured. These structural limitations, if unaddressed, may continue to adversely impact user adoption and growth.

Uniform Interfaces, Fragmented Needs: A UX Mismatch

The way the user experience is structured, a key strength of ONDC—interoperability—has also become one of its weaknesses. Most buyer apps on ONDC are designed as multi-category super apps, where users can browse everything from food and fashion to electronics and homeware within a single interface. A simplified user interface, meant to broaden the product base, offer a generic browsing and purchase experience across all product categories, leading to:

• Poor product differentiation
• Lack of contextual cues for decision-making
• Commoditization of offerings (e.g., a kurta, smartphone, and sandwich all displayed the same way)

This works against the grain of how users typically shop. Buying food is impulsive and time-sensitive, whereas shopping for fashion involves browsing, comparisons, and style exploration. Super apps are efficient, but when interfaces don’t adapt to category-specific expectations, they fail to create the trust and depth needed for meaningful engagement. 

Small Screens, Big Confusion

A recent user survey by Local Circles revealed:

• 54% of ONDC users found the apps difficult to navigate
• 35% reported poor customer service experiences

One overlooked culprit is mobile UI complexity. ONDC apps, by trying to do too much, end up doing very little well—especially on phone screens, where space is limited.

With multiple categories, dozens of sellers, multiple logistics partners, and overlapping offers, the information overload becomes real. Without strong personalization or assistive navigation, users are left to fend for themselves in a crowded, inconsistent experience.

Trust and Quality: The Open Network’s Blind Spot

Even when users complete purchases, they often report issues related to:

• Unclear product or food quantity
• Misleading visuals or incomplete information
• Deliveries failing due to incorrect mapping or poor coordination
• No easy path to dispute resolution or feedback

These are more than inconveniences—they’re trust-breakers.

A major difference between ONDC and closed platforms (like Amazon, Swiggy, or Flipkart) is that ONDC doesn’t own the customer experience end-to-end. While this decentralization is part of its innovation, it also means that no one player is fully accountable when things go wrong.

The open network model needs a robust framework to:

• Validate product listings and seller credibility
• Standardize portion sizes, ratings, and reviews
• Ensure logistics providers use precise mapping tools, not generic cost-saving ones
• Offer grievance redressal that builds long-term trust

Without these, users are more likely to try once—and not return.

Interdependence: Buyer and Seller App Dynamics

A common critique of buyer apps is their generic interface and limited product presentation. But it’s important to recognize that buyer-side innovation is constrained by what seller apps enable.

For instance:

• A buyer app can’t show richer images or detailed specifications unless the seller app provides them.
• Features like estimated portion sizes, ratings, or delivery precision rely heavily on the data integrity and tech capabilities of the seller or logistics partners.

This creates a symbiotic and causal relationship between buyer and seller apps—neither can innovate meaningfully without coordination from the other. If seller apps offer only minimal information, buyer apps cannot enhance product trust or personalization meaningfully. Likewise, there’s little point in seller apps uploading rich content if buyer apps flatten the experience into a standard layout.

This interdependence must be addressed through shared standards, data schemas, and incentives. ONDC’s promise of decentralization can’t come at the cost of disconnected experiences. Platforms must move from simply enabling interoperability to actively nurturing co-design between buyer and seller interfaces.

Questions Buyer Apps Must Start Asking

As ONDC matures, the real challenge lies not just in onboarding more participants, but in designing mutually reinforcing experiences. Buyer apps, seller apps, and logistics providers all share the responsibility for creating trust, clarity, and consistency. This calls for a fresh look at how the entire journey is structured and experienced.

Here are key questions for the ecosystem:

• Can interfaces across the network be reimagined to support category-specific buyer journeys, rather than relying on one-size-fits-all flows?
• How can participants co-create more seamless buyer experiences across discovery, ordering, fulfillment, and post-purchase support—without escalating costs?
• What network-wide standards or tools are needed to build trust at scale—such as verified reviews, certifications, and clearer product listings?
• Is the network enabling personalized, assistive experiences that reduce confusion and decision fatigue?
• What design nudges or UI conventions can encourage sellers to contribute richer, context-aware product content?
• What incentives or standards can drive improved last-mile reliability—from accurate mapping to real-time tracking and user communication?
• What shared frameworks or APIs are required to enable seamless and accountable grievance redressal, so users aren’t passed from one platform to another with no accountability??
• What new tools can facilitate shared discovery experiences—like bundles, curated lists, or assistive recommendations?

From Open Access to Trusted Experience

ONDC was never just about enabling access—it was about reshaping how commerce works in India. But for the network to grow beyond early adopters and incentives, it must prioritize quality, trust, cross app coordination and contextual design.

Retail commerce is not won by infrastructure alone. It’s won by experiences that feel intuitive, reliable, and repeat-worthy.