Zoho Invests ₹70 Cr in ONDC to Boost India’s Digital Commerce

Zoho Fuels ONDC with ₹70 Crore Investment

SaaS giant Zoho has announced a significant investment of ₹70 crore (approximately $7.3 million) in the Network for Digital Commerce (ONDC). This strategic financial infusion is aimed at bolstering India’s sovereign digital commerce infrastructure and accelerating the adoption of digital commerce solutions among Micro, Small, and Medium Enterprises (MSMEs). The investment underscores Zoho’s commitment to fostering an open and accessible digital ecosystem for businesses across the country.

ONDC’s Role in India’s Digital Infrastructure

The Open Network for Digital Commerce (ONDC) is a key initiative under India’s broader digital public infrastructure strategy. It seeks to democratize ecommerce by moving away from the platform-centric models dominated by large players like Amazon and Flipkart. ONDC operates as an open, decentralized network, enabling any buyer application to connect with any seller, irrespective of the platform they use. This model empowers small businesses by providing them with greater reach to customers and reducing their dependency on proprietary ecosystems, thereby fostering a more competitive and inclusive digital marketplace.

Synergistic Partnership Between Zoho and ONDC

Zoho’s engagement with ONDC extends beyond financial investment. The company has been actively collaborating with ONDC across its suite of commerce and finance products. Solutions such as Vikra, Zoho ERP, Zoho Books, Zoho Inventory, and Zoho Commerce are being integrated to help MSMEs digitize their operations, manage inventory efficiently, streamline accounting processes, and connect seamlessly with customers on the ONDC network. This deep integration highlights Zoho’s role in providing the foundational tools necessary for businesses to thrive in an open digital commerce environment.

ONDC’s Growth and Transaction Landscape

Launched by the Department for Promotion of Industry and Internal Trade (DPIIT) in 2021, ONDC has rapidly expanded its footprint. The network aims to bring millions of MSMEs into the digital fold. In the fiscal year 2026, ONDC reported facilitating 21.8 crore transactions across various segments including retail, logistics, mobility, and financial services. The network is currently operational in 616 cities and has onboarded over 7.64 lakh sellers and service providers. Monthly transaction figures in May 2025 indicated over 1.6 crore orders processed, showcasing substantial user engagement and operational scale.

Navigating Market Dynamics and Future Outlook

Despite its growth, ONDC’s retail transaction volumes have faced pressure recently, influenced by increased competition and shifts in incentive structures. transactions, encompassing categories like food delivery, grocery, fashion, and electronics, reportedly saw a dip in February 2025. Buyer-side applications, including prominent platforms like Paytm, Magicpin, and Ola, have also adjusted their discount strategies following the network’s recalibration of incentive payouts. Nonetheless, ONDC has demonstrated significant traction in specific sectors, such as onboarding over 10,000 kirana stores through its DigiDukaan initiative and experiencing an eleven-fold growth in order volumes from farmers, artisans, and rural sellers in FY26. The logistics segment has also seen robust scaling, with its FIFO fleet allocation model expanding significantly and onboarding major logistics players like Delhivery and Shadowfax.

Founding Members and Investor Ecosystem

ONDC’s foundational structure includes prominent institutions like the Quality Council of India and Protean eGov Technologies. The network’s growth is supported by a diverse investor base comprising leading financial institutions such as Kotak Mahindra Bank, Axis Bank, SIDBI, and ICICI Bank. This broad institutional backing reflects the confidence in ONDC’s potential to reshape India’s digital commerce landscape and create a more equitable ecosystem for businesses of all sizes.