MAM
Uncovering ONDC: India’s next D2C growth catalyst
Mumbai: The Indian e-commerce landscape is going through a monumental shift with the introduction of the Open Network for Digital Commerce (ONDC).
The government of India started this initiative to build a new era of interconnected e-commerce in India – providing small and medium businesses a fair shot in the game.
This further breaks the marketplace monopoly.
And the results are evident. ONDC has successfully captured the spotlight, with more than 100,000 merchants spanning 273 cities and 45 diverse entities in its network, including big brands like ITC, Red Bull, and Hindustan Unilever.
D2C brands all across the country have also embraced ONDC with open arms.
How D2C brands leverage ONDC to expand their footprint in India
D2C brands are often directly connected to shoppers through their own websites. This enables them to control all aspects of their business – from brand messaging and pricing to creating targeted marketing strategies.
However, challenges are expected to arise due to the complexities of reaching the target audience, competing with big brands, logistics, and payment processing.
SellerApp head of product design Sowmya Nagarajan said “ONDC is the way for D2C brands to reach more niche markets. At SellerApp, we ensure a smooth onboarding experience for brands onto the network, along with dedicated support to enrich their catalogue and storefront and amplify their brand presence.”
SellerApp, an e-commerce data analytics company, formed a strategic partnership with Google Cloud, an offering by Alphabet (NASDAQ: GOOGL) and Yes Bank to help MSMEs and brands onboard into the ONDC network and grow their reach in PAN-India. The company also provides market intelligence and business monitoring solutions for brands like Red Bull, True Elements, Patanjali and Bombay Shaving Company as part of their support.
Furthermore, D2C brands can alleviate these challenges by leveraging seller applications like SellerApp, Growth Falcon, and uEngage to get unrestricted access to the ONDC network. This gives them the wide reach and flexibility they require to grow.
Here’s how the process works:
Connect your D2C Store: Connect your D2C store to an ONDC-enabled platform like SellerApp to ensure smooth onboarding to the network.
Publish your product catalogue: Update your product catalogue on the ONDC network with the help of SellerApp catalogue management.
Simplify order and payment processing: SellerApp also simplifies order and payment processing – enabling you to provide a robust customer experience to buyers.
Monitor inventory: Monitor your inventory and get a snapshot of your inventory level with SellerApp to prevent last-minute stockouts.
ONDC Benefits for D2C Brands
ONDC brings countless benefits to D2C brands growing their e-commerce footprint in India.
Uncover opportunities in tier two & three cities
ONDC breaks urban barriers, connecting D2C brands with eager consumers in smaller cities and addressing logistical hurdles.
Escape marketplace monopoly
ONDC helps D2C brands break free from predatory pricing, biased algorithms, data limitations, and logistical challenges and levels the playing field for brands of all shapes and sizes.
Expedite product launches
ONDC enables D2C brands to launch new products, test the market and gather feedback rapidly. It allows them to improve the products before scaling up.
Enables mobile commerce
ONDC integrates with diverse mobile apps, like messaging, social media, gaming apps, etc., widening the reach for D2C brands in the Indian market.
Navigating the challenges of ONDC for D2C brand
While ONDC presents a golden opportunity for D2C brands to expand their e-commerce ventures in India, it’s not free from challenges.
Intense competition
The accessibility of the ONDC network escalates competition among D2C brands and e-commerce players.
Brands must create distinct value propositions, focus on quality and provide outstanding customer experiences to stand out.
Compliance adherence
ONDC requires brands to comply with certain government regulations, which can hinder growth opportunities.
Brands need to proactively ensure all compliances are met to protect customer trust and maintain ethical business practices.
Cybersecurity vulnerabilities
ONDC exposes brands to cybersecurity risks like hacking, phishing, malware and fraud, requiring an extra layer of security measures to safeguard customer data.
Looking ahead
The Government of India’s ONDC initiative is set to revolutionise the e-commerce landscape in India, providing SMBs and D2C brands access to a more inclusive market. However, some challenges exist regarding implementation and adoption.
D2C brands must weigh the opportunities and risks of joining the ONDC network and make smart decisions to set the stage for their future growth in India.
Brands
Kwality Wall’s reports standalone losses following strategic HUL demerger
Ice cream major faces Rs 64 crore Ebitda loss amid commodity inflation and muted Q3 sales
MUMBAI: Kwality Wall’s (India) Limited (KWIL) has released its first set of financial results as a standalone entity, revealing a challenging start to its independent journey. Following its successful demerger from Hindustan Unilever Limited (HUL) on 1st December 2025 and its subsequent listing on 16th February 2026, the company is navigating a transition period marked by structural changes and high input costs.
For the quarter ended 31st December 2025, the company reported revenue of Rs 222 crores. Despite the revenue base, the bottom line was impacted by several factors, resulting in an Ebitda loss of Rs 64.2 crores. When calculated on a Pre-IND AS 116 basis, the Ebitda loss stood at Rs 83.8 crores.
Organic Sales Growth (OSG) declined by 6.5 per cent year-on-year during the quarter. Volume growth, however, saw a marginal increase of 1.2 per cent. The company reported a gross margin of 41.5 per cent. Additionally, exceptional expenses amounting to Rs 94 crores were recorded, primarily linked to non-recurring costs during the transition phase.
Performance across portfolios and channels was mixed. Within the impulse portfolio, brands such as Magnum and Cornetto recorded mid-single digit volume growth, indicating steady demand in on-the-go consumption. However, the in-home portfolio, which includes take-home packs, experienced muted consumption. The company is planning a relaunch of this category with improved offerings ahead of the 2026 season.
Quick commerce (Q-Com) continued to emerge as a strong growth driver, delivering robust double-digit growth during the quarter. Meanwhile, the company also expanded its physical distribution network by increasing the number of company-owned cabinets across markets.
Margin pressure during the quarter was driven by a combination of one-off factors and broader cost inflation. Gross margins were impacted by around 600 basis points due to trade investments made for stock liquidation. Additionally, cocoa price inflation contributed to another 400 basis points of pressure on margins.
Deputy managing director Chitrank Goel attributed the muted performance partly to prolonged monsoons and transitional challenges linked to the GST framework. Operating expenses also increased as the company invested in establishing its standalone supply chain, operational systems and corporate infrastructure following the demerger.
Looking ahead, the management remains focused on a volume-driven growth strategy. To restore profitability, the company has initiated a cost productivity programme aimed at reducing non-consumer-facing costs. It is also working on building regional manufacturing networks to optimise logistics expenses and improve operational efficiency.
The commodity outlook for the near term remains mixed. Dairy prices are expected to remain firm due to tight supply conditions and rising fodder costs. Sugar prices may also move higher following increases in the Minimum Selling Price (MSP). While cocoa prices have moderated recently, currency depreciation has offset some of the potential cost relief for the company.
