Open Network for Digital Commerce (ONDC) is an initiative aiming at promoting open networks for all aspects of exchange of goods and services over digital or electronic network.
ONDC, is a private non-profit Section 8 company established by the Department for Promotion of Industry and Internal Trade (DPIIT) of Government of India to develop open e-commerce. It was incorporated on 31st December, 2021.
ONDC has democratize e-commerce in India and e-comm won’t be limited to few players. Everyone, every supplier including kirana stores, grocery retailers, electronics retailers, small vendors, service providers and restaurants will participate in the digital marketplace on an open platform.
The ONDC will work on a format similar to that used in (UPI) Unified Payment Interface. ONDC is not platform-centric, and its objective is to match the online consumer’s demand with the nearest available source of supply. Consumers can thus find any seller, product, or service via any compatible application or platform – offering real freedom of choice. It wants to harness the network to discover the best pricing among retailers and sellers.
According to the commerce ministry, the foundations of ONDC are open protocols for all aspects in the entire chain of activities. With ONDC, sellers and buyers do not need to be on the same platform for a transaction to happen.
Buyer side application will help the buyers search for the product or service they want to buy.
Gateway will allow discoverability of all sellers in the network (based on criteria such as location, availability and other customer preferences). Seller side application will receive buyer’s requests, show the sellers’ catalogue of goods and services, and fulfil the buyer’s demand.
What is it for the sellers?
- Access to more buyers.
- Low cost of doing business.
- Better discoverability of products and cost as seller will have access to all buyers on the network.
- Autonomy on terms because of multiple choices for being digitally visible.
- More options for value chain services like logistics & fulfilment.
What’s there for buyers?
- Access to more sellers and therefore more choices.
- Better service and faster deliveries due to access to hyper-local retailers.
- Better customer experience.
How will it help Small online retailers?
- ONDC will enable providers of niche products and services with the benefit of scale and critical mass, to go online.
- Will give small sellers access to systems and technology that currently only giants like Flipkart and Amazon enjoy. Even Amazon, Flipkart & Zomato, etc. will have to register on this platform.
- It would help millions of small businesses go online and give a huge booster shot to smaller online retailers and new entrants.
What about data protection?
According to the government’s official statement:
- ONDC shall take all measures to ensure confidentiality and privacy of data in the network.
- It shall not mandate sharing of any transaction level data by participants with ONDC.