What is ONDC: Open Network for Digital Commerce (ONDC) is an initiative of the Indian Government to make eCommerce accessible through open networks. ONDC is a set of specifications based on open-sourced methodology. It utilizes open specifications and network protocols that ensure it is independent of any one platform. It is designed to nurture open interchange and connections between consumers, technology platforms, and retailers.?
This platform ensures that consumers and suppliers can transact goods and services independently of the platform or application. ONDC is all about breaking the current platform-centric eCommerce model and providing an open network that any smart buying platform can access.?
- How does ONDC work: ONDC is a government-backed project: ONDC is a non-profit private Section 8 company established by the Department for Promotion of Industry and Internal Trade of the Government of India.
- Enables access to processes and technologies used by large eCommerce platforms: Operations like listing, stock management, order management, and order fulfillment can be standardized using the protocols set by ONDC.
- It provides better discoverability and trust for small and medium enterprises. Simplified payment processing is also available.
- It offers data transparency. ONDC can rate service providers that will be applicable and visible across the network.
- The platform is not limited to selling and buying within just one eCommerce site. It also offers digital marketing opportunities.
- ONDC provides easy-to-use tools to create a branded storefront. Small businesses are also entitled to discount programs.
- ONDC offers access to different types of products that may not be available on eCommerce sites but are easily available locally.
It provides a unique opportunity for small traders and mom-and-pop stores.
- The Objectives of ONDC: Ending monopolies of the platforms:?It aims to provide equal opportunities to all players in the market. It strives to provide a conducive environment for small businesses to compete with established players.
- Enable digital commerce to be small business friendly:?It provides easy-to-use tools and resources for small retailers to grow and expand their businesses online.
- Increase eCommerce penetration in rural areas:?It provides access to new markets and opportunities for small businesses in rural areas.
- More focus on apps in Indian languages:?It provides a platform for small retailers to reach a wider audience with their products and services.
- Digitization of the value chain:?It aims to streamline processes and make them more efficient and cost-effective.
- Standardization of operations:?It provides a common set of protocols and guidelines for small retailers to follow.
- Increased efficiency in logistics:?It provides a platform for small retailers to connect with logistics providers and streamline their supply chain.
- Wider choices of products and services:?It provides access to a diverse range of products and services for small retailers to offer their customers.
- Data privacy and confidentiality:?It aims to ensure that all data and information shared on the platform are secure and protected.
- Decreased cost of operation:?ONDC aims to provide cost-effective solutions for small retailers to grow and expand their businesses online.
By 2026, eCommerce is anticipated to attain 11.4 percent of the total Indian retail market. With the implementation of ONDC, the Indian government is trying to increase eCommerce accessibility to various small and medium businesses and rural areas. ONDC has provided smaller sellers and merchants with a platform to showcase their products and enter the digitized business. ONDC is aiming to bring 30 million sellers onto its network via hundreds of seller-side platforms by the end of 2024. The higher number of eCommerce platforms registering on ONDC would portray the success of ONDC in the long run.
