ONDC Extends Content-to-Commerce Opportunity to News Media Platforms

The Open Network for Digital Commerce (ONDC), a government-backed initiative aimed at fostering a more open and competitive e-commerce landscape in India, is venturing beyond traditional participants. After attracting tech giants, restaurant chains, and FMCG majors, ONDC is now setting its sights on news media platforms.

A New Revenue Stream for News Media

ONDC's proposition to media companies is clear: move beyond advertising and create a more direct path to e-commerce revenue generation. Traditionally, media houses have relied on advertising and affiliate marketing models, limiting their control over the transaction process and potential earning potential.

From Advertising to Demand Generation

"With ONDC, e-commerce is unbundled," states a memo circulated by Open Network for Digital Commerce (ONDC) to media companies. "Media houses can enable their consumers to transact directly using their channels, while other players handle sellers, inventory, and fulfillment."

This shift allows news platforms to curate a selection of products and services tailored to their audience's needs, transitioning from advertising to directly driving demand and capturing a larger share of the e-commerce value chain.

Dainik Jagran Leads the Charge

Dainik Jagran, a prominent Hindi-language media house, is the first news platform to embrace ONDC's vision. Jagran New Media, the digital arm of Dainik Jagran, is in the final stages of integration and poised to launch e-commerce operations in categories like fashion, home & kitchen, groceries, and electronics within the next few weeks.

Sources also suggest ONDC is actively courting another major media house with a strong print presence to join the network.

A Solution for Declining Ad Revenue

This move by ONDC comes at a critical juncture for news media platforms grappling with declining advertising revenues. The dominance of tech giants like Google and Meta in the digital advertising space presents a significant challenge.

According to a recent EY-FICCI report, online news reached 456 million users in India in 2023, while smartphone penetration stands at 574 million. By 2026, online news users are expected to surpass 500 million. However, the report cautions that news consumption may not necessarily translate to revenue on news apps or portals. Audiences might shift to social media, D2C apps, or aggregators, making monetization a pressing issue.

Jagran New Media's Ambitious Plans

Jagran New Media is optimistic about the ONDC integration. "This covers the entire suite of Jagran news and information platforms, reaching over 80 million monthly active users," said Gaurav Arora, COO of Jagran New Media.

The company plans to leverage ONDC to expand its e-commerce offerings beyond the initial categories. Consumer durables, health & wellness, beauty & personal care, and F&B are all on the roadmap, with a potential foray into financial products and services in the future.

Challenges and Opportunities

Analysts remain cautious about the potential of news platforms in e-commerce. "News apps have a relatively small user base compared to consumer tech apps," noted Karan Taurani, a media sector analyst at Elara Capital. "It might be challenging for them to compete effectively."

However, ONDC's success in attracting established players like Ola, PhonePe, Meesho, Shiprocket, ITC, and Unilever demonstrates the growing interest in a more balanced e-commerce landscape. The six-fold increase in the monthly volume of retail purchases on ONDC (from 600,000 in September 2023 to 3.6 million in March 2024) further underscores the initiative's potential.

The integration of news media platforms into ONDC represents a novel approach to e-commerce and could pave the way for a more diverse and competitive digital marketplace in India.

Conclusion:

As ONDC embarks on its journey to onboard news media platforms, it heralds a new era of collaboration between content creators and e-commerce facilitators. By bridging the gap between content consumption and commerce, ONDC aims to democratize e-commerce and unlock new avenues for growth in the digital economy.