Shift 2 of 9

Represent what a node can accomplish, not only what it stocks.

FromSKUToCapability

A catalogue describes what a business has. A capability describes what it can do. For missions like repair, installation and customisation, the second is what the customer actually needs. Representing it cheaply and accurately may be the most important problem in the whole architecture.

Level 2 Evidence-reviewed6 min readLooking for a pilot partner

A product is an answer; a mission is a question

This is not an argument against catalogues. When you know exactly what you want, search, product, price and checkout make up one of the most efficient interfaces ever built. The trouble starts when the consumer doesn’t have a product problem but a mission.

India’s supply makes this acute. More than 75% of retail comes from unbranded products, regional brands and D2C brands, and regional taste and customisation multiply SKUs across categories[1]. Even so, much of what local businesses offer isn’t a SKU at all. The evidence review calls the distinction between a SKU and a capability the strongest product insight in the concept.

illustrative Constructed to explain the idea, not data.

CategorySKU queryMissionWhat it needs
Home“Wooden door”“A traditional solid-wood entrance door under ₹50,000, installed before Diwali”Design, material, measurement, budget, installation, deadline
Appliances“Washing machine”“Mine stopped working. Can someone diagnose it today and fix it if the part is available?”Diagnosis, technician, spare part, same-day slot
Home improvement“Acoustic panels”“My room echoes and I record podcasts in it”Diagnosis, materials, placement, installation
Apparel“Blouse”“A blouse stitched for a wedding next Saturday; I have the fabric”Tailoring, embroidery, fitting, deadline
Food“Cake”“An eggless cake for 40 with a custom design, delivered Saturday evening”Production, customisation, scheduled delivery

The evidence review lists missions of the same shape: finding a stylist who can handle curly hair, choosing and installing a water purifier, or getting a local supplier to make 200 branded gift boxes. None of them is a single-SKU query.

A shop holds more than its catalogue

Digitally, a neighbourhood electrical shop might appear as a list of bulbs, switches, wires and fans. The business itself holds far more illustrative.

LayerWhat it isIn the electrical shop
Physical inventoryWhat is on the shelf nowBulbs, switches, wire, fans
Latent inventoryWhat can be sourced quicklyA specific fitting from the distributor by tomorrow
Production capabilityWhat can be made or configuredA lighting or inverter setup assembled for one home
Service capabilityWhat can be installed, repaired or maintainedWiring and fan installation through an associated electrician
Knowledge capabilityWhat can be diagnosed or advisedWhy a circuit keeps tripping
Network capabilityWho can be brought inElectricians, a carpenter for a false ceiling

The catalogue captures a fraction of the commercial asset. The real asset is capability, and it is partly physical, partly informational and partly relational.

A catalogue is a snapshot; capability is a possibility space

A catalogue says here is what I have. Capability says here is what I can do. Take a carpenter illustrative. The catalogue lists a table at ₹18,000, a chair at ₹4,500 and a shelf at ₹7,000. The capability profile says custom solid-wood furniture, space-specific design, restoration, modular storage and installation, with seven-day production capacity and a 12 km service radius.

Only the second can answer this request: “I have a six-foot wall, need concealed storage, prefer natural wood, my budget is ₹40,000, and it has to be installed within two weeks.” The question stops being which product matches and becomes which commercial node can solve this mission.

Today
  1. Consumer
  2. Product
  3. Merchant
Proposed
  1. Consumer
  2. Intent
  3. Capability
  4. Commercial node
  5. Offer

The product becomes an output of the interaction rather than its starting point.

Go deeper

Three linked representations

Following the evidence review, each business needs three linked representations. Offer covers what a customer can buy: products, services, bundles, packages, appointments and made-to-order items, with prices and availability. Capability covers what the business can do: customise, repair, install, design, source, manufacture, advise, diagnose or maintain, within stated capacity limits. Proof covers why anyone should believe it: identity, credentials, photos, video, completed work, reviews, service-level history and policies.

This is not a case for abandoning catalogues. Structured offer data is still needed for matching, price display, settlement and fulfilment. The point is that the catalogue should stop being the only representation of local commerce.

What a record could look like

A sketch of the fields, not a specification illustrative:

node:
  type: service_professional        # an electrician
  service_area_km: 8
offers:
  - service: switchboard repair
    price_band: "₹300–800 per visit, parts extra"
  - service: ceiling fan installation
    price_band: "₹350 per fan"
capabilities:
  - name: residential fault diagnosis
    equipment: [multimeter, thermal camera]
    lead_time: same day
    capacity_per_week: 20
  - name: smart-home device installation
    lead_time: 2 days
proof:
  - claim: business identity
    status: network-verified
    last_checked: 2026-09-10
  - claim: electrical licence
    status: third-party-verified
  - claim: 146 completed jobs
    status: transaction-derived      # counted only from network transactions
  - claim: specialist in old-wiring upgrades
    status: self-declared
fulfilment:
  modes: [appointment, same-day visit]
  escalation_owner: node

Two design choices matter. Every proof entry carries a verification status (the ladder in Shift 6), so the interface can never blur a claim with evidence. And fulfilment is part of the record, because a service business’s promise includes when and how it turns up. Which of these fields ONDC’s current domain specifications can carry, and which would need extensions or new specifications, is a design question for the pilot.

Who builds and maintains it?

Asking every small merchant to maintain SKUs, capabilities, credentials, availability, capacity, service areas, photos, videos and reviews would recreate the digitisation burden that kept many of them offline in the first place. Many are already partly digital: they accept UPI, use WhatsApp and appear on a map, yet have nothing structured that an agent could query.

The evidence is instructive. In a study of 1,003 small fixed-store merchants in Jaipur, 58% had adopted no digital payment method even though adoption was affordable. Among adopters, 81.4% of transactions were still in cash. The most common reason given was lack of customer demand[2]. The study is older and concerns payments, not discovery, so it shouldn’t be read as a measure of digital invisibility today. Its lesson is behavioural: merchants digitise when customers ask for it and the workflow fits, not because the tool is cheap.

So the architecture needs a merchant representation layer. It takes very low-friction inputs, such as a WhatsApp message, a voice conversation, photographs, invoices, an existing catalogue, a map or ONDC listing, a short walkthrough video or an assisted onboarding visit. From these it progressively builds offer, capability and proof, with periodic human verification.

Accuracy matters as much as cost. An automatically generated profile that overstates what a merchant can do is worse than no profile, so extraction errors have to be measured by sampling from the start. If representation is expensive, the network never reaches density. If it is cheap and accurate, and improves with every transaction, the network gets richer over time.

What could go wrong

  • Representation cost.If profiles and content cost more to create and maintain than the demand they bring is worth, merchants drop out and the graph goes stale.
  • Supply quality.A locality may contain many businesses but too little verifiable capability to support reliable matching.
  • Overstated capability.Automated extraction that inflates what a merchant can do will fail in front of customers, which is worse than having no profile.
  • SKU-shaped demand.If most real requests turn out to be simple product queries, the thesis narrows sharply. Shift 3’s test measures that share.

How we’d test it

Kill thresholds should be set before launch.

The shift ends if

Upkeep beyond about two hours per merchant per month, or too few verifiable providers to fill a shortlist of three.

The testWhat we would measureWhat would end the idea
Representation cost (Experiment 2)30 merchants: human minutes to create and maintain a profile; share generated automatically; extraction error rate by samplingUpkeep beyond about two hours per merchant per month, or errors above the agreed threshold
Supply qualityShare of discovered providers whose capability, availability and service area can be verifiedToo few verifiable providers per mission category to fill a shortlist of three

How strong is the evidence?

Established
India’s retail supply is fragmented and SKU-heavy (Redseer estimates).
Evidence-supported
Offer, capability and proof as linked representations; merchants digitise when customers ask, not because tools are cheap [2].
Hypothesis
Capability can be represented cheaply and accurately from low-friction inputs.
Unknown
Extraction accuracy, maintenance cost, and who owns the capability taxonomy.

Once a business is represented by what it can do, the next question is how a customer finds it: by naming a product, or by describing a problem?