With an aim to digitize the value chain, standardize operations, promote inclusion of suppliers and enhance value for consumers, the government recently launched an initiative – Open Network for Digital Commerce (ONDC). The government envisions ONDC as an initiative to promote an open network for all aspects of exchange of goods and services over a digital network.
Known as an alternative to the e-commerce landscape, ONDC which is a non-profit company, providing equal opportunities to small retailers to enjoy the benefits of the digital world and allow them to do business on a common platform wants. The initiative was launched in April by the Ministry of Commerce and Industry in a pilot phase in five cities of Delhi-NCR, Bengaluru, Bhopal, Shillong and Coimbatore. The government is aiming to reach around 100 cities by the end of August.
what is ondc
ONDC is a freely accessible online system for merchants and consumers and is significant as the government intends to eliminate the digital monopoly and monopoly of giant tech companies like Amazon, Flipkart, Zomato and others. Using any ONDC-compatible application or platform, consumers can search for any vendor, product or service, thus giving them the freedom of choice.
open protocol
ONDC is a network based open protocol that will allow any network enabled application to discover and engage in local commerce across all regions. It is an advancement over the current platform-centric e-commerce system, in which both buyer and seller must use the same platform or application to conduct business transactions.
The platform intends to help create opportunities, reduce digital monopolies and bring MSMEs and small traders to a digital platform where businesses and consumers will be able to transact on ONDC using any compatible app of their choice , thereby giving consumers the option to choose any vendor. product, or service by using any appropriate app or platform.
two way conversation
Woodstreet CEO Lokendra Singh Ranawat said that ONDC aims to provide a two-way contact between seller and buyer. In this way the seller is able to connect with multiple buyers and the buyer also gets the freedom to connect with different sellers. This leads to diversification for both buyer and seller and potentially caters to 130 crore Indian consumers with various opportunities.
ONDC helps vendors and businesses to reach their customers directly by establishing a direct-to-consumer (D2C) channel and enabling the elimination of middlemen, which ultimately results in fair prices for the customers and a profitable margin for the business. leads to.
Lokendra said, “ONDC focuses on creating new opportunities for Micro, Small and Medium Enterprises (MSMEs) who fail to get the benefit of e-commerce platforms due to predatory pricing on larger platforms.” Small businesses as well as new players in the market. “It will empower sellers and buyers by breaking the monopoly of large market parties to drive innovation.”
More transparency, less exploitation
With ONDC, sellers will be able to reach out to new customers and create high potential growth areas of digital commerce where they can also create their own terms and conditions. Buyers, on the other hand, will have multiple options on a single platform and can reach out to sellers on ONDC through any app integrated with the network.
“Overall, there will be more transparency, better regulation to reduce exploitation, fair trade rules and an upgrade of the local economy,” he said.
Ridhima Kansal, Director, Rosemoor, said that ONDC will take the Indian digital commerce industry into a new era by enhancing the overall discovery capability of merchants and sellers.
“The Indian e-commerce industry is still in its early stages. However, Indian digital consumerism is growing at a fast pace and is expected to reach $200 billion in the next 5-7 years. The growth will be due to the younger demographic, largely on aggregate demand and overall increase in per capita disposable income,” she said.
hyperlocal delivery
Raghunandan Saraf of Saraf Furniture said that ONDC will help offline retailers compete with online sellers, thereby increasing hyperlocal deliveries.
“This will enable small businesses to showcase their products on multiple e-commerce websites, without having to register on each platform separately. With this model, the government is able to create a platform that is seamless works and provides consumers and sellers with options.” They said.
Rimjhim Hada, Co-Founder and Creative Head, Aachho, said that ONDC is the future of digital commerce in India as it aims to prevent digital monopolies and standardize online commercial interactions.
“The growth of internet and e-commerce sector in India is picking up post-pandemic and in the game of ONDC, it is expected to accelerate further,” she said.
limit digital monopoly
Hritesh Lohia, Founder, Preeti International said that ONDC has the potential to be the next UPI which is India’s most successful digital product.
“This is a great way to limit digital monopolies. ONDC has the potential to change the game. It will benefit smaller online retailers and new entrants by increasing discoverability, interoperability and inclusivity.”
Most of the global tech giants including Amazon, Walmart, Google, Meta, etc. are betting big on the Indian e-commerce story. Similarly, international PE companies such as GIC, ADIA, CCPIB, Sequoia and Warburg Pincus are confident about the potential of Indian digital consumerism.
Amidst such a positive turn of events, the recent announcement to develop a holistic and democratic system like ONDC may give more positive impetus to India’s e-commerce ambitions. It can reshape the entire industry by providing equal opportunities to all types of traders and sellers.
As per government estimates, ONDC will positively impact around 3 crore vendors and 1 crore vendors. It will also help buyers find better deals and options by giving them a more democratic digital platform.