It is time to regulate India’s E-Commerce framework with ONDC
India’s Open Network for Digital Commerce (ONDC) aims to bring a sustainable approach for the sale and purchase of goods and services online and the Rules apply to e-commerce entities including Amazon, Flipkart and Reliance Retail. Major e-commerce players in the Indian market are likely to join the Open Network for Digital Commerce (ONDC).
The Open Network for Digital Commerce (ONDC), an open e-commerce network, is an initiative of the government to promote an open platform for all aspects of the exchange of goods and services through electronic networks.
The ONDC has been initially launched in five cities in India- Delhi NCR, Bengaluru, Bhopal, Shillong and Coimbatore - on 29 April on a pilot basis to on-board Kirana stores and small and medium businesses. According to the report, ONDC, which still is at a nascent stage, is being pitched as a solution to break the dominance of large e-commerce firms like Walmart-owned Flipkart, Amazon and others in India.
In this backdrop, any move by these major e-commerce players to join the network will assume huge significance. E-kart, the logistics arm of Flipkart, has already integrated with ONDC for logistics services while the Flipkart-owned PhonePe is reportedly in the process of joining the network. A report says, Paytm has already joined the network.
ONDC is a decentralised platform that will allow buyers and sellers to connect and transact with each other online irrespective of which ecommerce portal(s) they are listed on. “The bigger ecommerce players have indicated to ONDC that they will support it. Besides tapping into new users, this will also enable platforms with sizable business-to-business verticals to tap into the seller side of ONDC network to supply goods.
Dynamic pricing, inventory management and optimisation of delivery cost are the three important things in ONDC which will help reduce the cost of doing business for everybody, including retailers. ONDC aims at fostering open networks developed on open-sourced methodology, using open specifications and network protocols, and independent of any specific platform.
The government has set up a nine-member advisory council, including Nandan Nilekani from Infosys and National Health Authority CEO R S Sharma, to ascertain steps required to design and accelerate adoption of ONDC. This platform will help consumers to potentially discover any seller, product or service by using any ONDC-compatible application or platform, thus increasing freedom of choice for consumers. So far only bigger players are able to take advantage of e-commerce and small people are still out of it.
Finally, Once the ONDC gets implemented and mandated, as is expected by August 2022, all e-commerce companies in India will have to operate using the same processes, akin to android-based mobile devices, irrespective of the brand.
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