ONDC grabs all limelight; sidelines Indias e-commerce monopolies

As per reports, 20 government and private organisations have confirmed investments

I’m sure every Bollywood fan must be familiar with this dialogue of Shah Rukh Khan, “Rahul, naam toh suna hoga?”   

Similarly, all the e-commerce shoppers would very soon find themselves to be familiar with ONDC! Open network for digital commerce (ONDC) is an initiative aimed at promoting open networks for all aspects of the exchange of goods & services over digital or electronic networks. ONDC is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.  

ONDC is being marketed as an alternative to dominant global giants such as Amazon.com and Walmart owned Flipkart in India’s fast-growing e-commerce market, which is pegged as a USD 200 billion opportunity by 2027.    

Let’s understand more about the ONDC platform and what it seeks to achieve.  

As we have stated earlier, the e-commerce market is expected to see a sharp growth, which is pegged at a staggering USD 200 billion by 2027 but the issue is that e-commerce giants like Amazon and Flipkart (owned by Walmart) have a lion share in India’s e-commerce market (60 per cent) while Tata and Reliance are joining the race to the top. This has left small retailers and mom-and-pop (Kirana) stores in a catch-22 situation.   

However, with the introduction of the ONDC platform, the fate of small retailers and mom-and-pop (Kirana) stores can change now! As ONDC will not be following a platform-centric model, the Indian government hopes that it will democratise the country’s online market for all buyers & sellers, irrespective of their size, so that millions of small retailers and mom-and-pop (Kirana) stores get an equal opportunity.  

How does the ONDC work?   

Let’s say you want to buy a pair of shoes online. In that case, you might browse an e-commerce company’s app or website and search for the product. If you are happy with the product specification & price, you’ll add that item to the cart and proceed to checkout. In case you don’t get the desired option or quality of the product, you’ll shift to a different platform or another company’s website to check out the range of products. However, post-implementing ONDC, multiple sellers can be listed on this platform. Thus, ONDC would standardise operations, promote inclusion of local suppliers, drive efficiencies in logistics, and lead to enhancement of value for consumers. 

Let us understand by continuing the above example of a pair of shoes or rather, flipping through different platforms or the company’s app. Buyers can get all the options of pairs of shoes from different platforms on a single platform i.e. ONDC.   

With this platform, the government will grant a level playing field to small players to engage their customers using digital technologies. However, as goes the saying, every rose has its thorn; at present, this applies to the ONDC platform as well. The assumption is considering that it’s an open-source platform and no one is liable for payment-related issues. Moreover, different e-commerce platforms might not offer several kinds of payment methods.   

Who are key stakeholders to the ONDC?   

As per reports, 20 government and private organisations have confirmed investments worth Rs USD 33.34 million.   

Pilot-phase   

Now, in its pilot phase, ONDC has been rolled out in five cities – Delhi NCR, Bengaluru, Bhopal, Shillong, and Coimbatore. While operations are presently focussed on retail & restaurants, and in facilitating real-time transactions, the open network will extend to other categories like travel as well as mobility.