How Open Network for Digital Commerce Helps Online Retailers?

The government of India is establishing an Open Network for Digital Commerce (ONDC) to democratize eCommerce and to offer alternatives to proprietary eCommerce sites. The announcement came into effect after Piyush Goyal, the Minister for Commerce, held a meeting with an expert team to discuss the need and possibility of ONDC. The setting up of an ONDC is considered a forward step to break the monopolistic influence of platforms including Amazon and Flipkart. They are always in the news for wielding monopoly power and breaking the laws.

The Definition

As Unified Payment Interface, shortly known as UPI, is the core of the digital payment domain. Many ecommerce players opted for UPI as it reduces COD Payments. ONDC holds the same relevance to the eCommerce segment in the country. It empowers buyers and sellers to digitally visualize and transact through an open network irrespective of the platform/application.

It is more about forming a single network to drive innovation and scale, evolving and growing all types of businesses. The focus of ONDC is to promote open networks developed via an open-sourced methodology using available specifications and network protocols that work on any specific platform.

The Quality Council of India (QCI) is bestowed the responsibility of integrating eCommerce platforms through a network based on open-source technology.

Implementation of ONDC

Are you thinking about the implementation of ONDC in the country? It is expected to follow the current formats of UPIs that could be transparent enough to put forth various operational aspects by the eCommerce platforms at the same level, such as seller onboarding, vendor listing, price discovery, product cataloging, etc. The ONDC channel will facilitate buyers and sellers to enjoy smooth transactions irrespective of their association with one specific eCommerce portal.

Significance of ONDC

ONDC holds great relevance in today’s unorganized eCommerce industry, where major players enjoy the maximum market share. If implemented successfully, ONDC could help organize the segment by empowering all big and small sellers and buyers to operate using the same processes such as Android-based mobile devices.

Seen as a booster for small or new players, the proposed platform may pose a threat for established eCommerce companies with processes and technology to ensure smooth operations. It is expected to revolutionize and transform the entire value chain by standardizing procedures and promoting all sized operators & suppliers while providing efficient and dependable logistics services for improved value for end customers.

The Government’s Take

Many reasons clinch the government’s interest in streamlining and unifying the scattered eCommerce industry in India. The outbreak of the Coronavirus pandemic forced every user to go online for their every need, fuelled the economy's growth, and increased their dependency for getting things of choice at doorstep, and has pushed the eCommerce scope in the country today. 

Next, the number of incidents about eCommerce players breaking the country’s laws and complaints of discrimination from sellers and buyers have been a cause of concern for the government. All these reasons have strengthened the need to form a common and open platform for sellers and retailers with assured safety and security in an open market without needing to be bound by a single eCommerce platform, pushing the government to look for viable solutions in the matter.

Voices from Critics

The idea of ONDC seems a doubtful concept for critics in the country as they view it as a solution searching for a problem’. They view it as a far-sighted solution at the moment as sellers are currently free to list their products across eCommerce platforms even today. Also, they are free to enjoy price comparison on many dedicated private websites to help them make informed decisions. Reasonably, they view the idea of breaking into a monopoly as unjustifiable as every business has a limited monopoly over its operations. Therefore, it may not serve purposefully.

The Future Calling

The relevance and the true worth of ONDC as the open eCommerce platform is to test the waters in the coming month when it will go on the floor. It is interesting to witness the sellers' and retailer's reactions and listing of products through this defined channel. Although competition is at an all-time high and buyers are looking for lucrative ways to connect with millions of customers worldwide, the government’s backed platform is yet to prove its mettle.