Recently you may have heard about a new E-Commerce platform named ONDC(Open Network for Digital Commerce) launched by the Indian Government to support small retailers and traders. ONDC is an initiative of the Quality Council of India and DPIII under the ministry of Commerce and Industries. It has been launched in five cities in India. Delhi, Bengaluru, Coimbatore, Bhopal, and Shilling are the five cities where the first phase is being carried out. Later it will be launched in multiple cities across India in the upcoming six months.
ONDC is an open platform that aims to promote an open network developed on open-sourced methodology, using open specifications and open network protocols, independent of any specific platform. It is lined with Unified Payment Interface(UPI).
In the current scenario if a user needs to purchase a good like a shirt, gifts, electronic items, or a service like cleaning and repairing then the user has to visit a different website and application to do so. In different places, he may have difficulty comparing prices and other details. To make it easy for the consumer as well as for the retailer, ONDC will have all the product details listed by the retailers and all other platforms like Amazon, Flipkart, or Myntra. Users will compare all the available products on one platform which is ONDC E-Commerce and then place their order from it without logging into other applications.
ONDC is coming up with some distinct features and advantages that make it different from other E-Commerce platforms. Some of them are listed below:
Inclusivity: ONDC is created so that anyone from any region of India can take advantage of ONDC by registering themselves on the ONDC platform. Interoperability: Small traders and retailers can simply register themselves on ONDC and then they can sell their products in many parts of the country. This gives them a better chance to stand and grow in this tough competition. Discoverability: As discussed earlier ONDC will make it easier for the buyer as well as the seller to get discovered on the platform. It will give them exposure to the complete market of India.
While creating ONDC it was ensured to make it in a way that it kills the monopoly of the major E-Commerce businesses like Amazon and Flipkart. To make this happen the following features have been implemented:
Lower time to market and scale. Transparent rules. Lightweight investment. Lower cost of business acquisition.
At present, there is a duopoly of only two large e-commerce businesses Amazon and Flipkart in India. They both control more than half of the country's e-commerce trade which is expected to reach 200 billion dollars by 2025. Because of their duopoly, the access to the market is limited and is not available to all. And even though some sellers are getting opportunities they are being discriminated against their preference for their own stocks and products. These two companies also charge larger margins. To prevent such problems ONDC is envisaged. ONDC will democratize e-commerce and create new opportunities, especially for micro, small and medium enterprises MSMEs, and small traders.
Although the concept of ONDC looks promising, but the actual implementation is not easy. Also, ONDC is going to have some major issues that the Indian Government needs to be aware of and must be isolated and reduced. Issue like:
The biggest issue with ONDC is that Will it be accepted by big e-commerce companies like Amazon and Flipkart. For now only Paytm has accepted to be alined with it but what about other big players. One more major issue with ONDC is about their courier, payment and refund pocicies. How will they take payments and after payments and delivery is there any chance of refund if so then how it will be done? All these issues are scary for ONDC. There can also be legal issues with ODNC. As in India's constitution government's entrance into the e-commerce business is restricted to some extent. This can make the big companies come together to change the government's steps and its monopoly.
Department for Promotion of Industry and Internal Trade(DPIII) said that the ONDC is a set of standards for voluntary adoption by sellers or logistics providers or payment gateways. As many as 80 firms are currently working with the ONDC and they are at different stages.
In the pilot phase. the target is to onboard 150 retailers in five cities - Delhi NCR, Bengaluru, Bhopal, Shillong, and Coimbatore. In the pilot phase, the ONDC has roped in eSamudaay, ERP Player Gofrugal, digital marketing outfit Growth Falcon, and automation and data insights outfit Sellerapp to work with sellers.
Going forward the target of the ONDC is to onboard 3 crore sellers and one crore retail merchants online. As many as 20 organizations of national repute have confirmed investments of rupees 255 crores into the ONDC. Lenders such as the State Bank of India, UCO Bank, HDFC Bank, ICICI Bank, and Bank of Baroda have already committed investments.