ONDC to unlock new opportunities

Open Network for Digital Commerce (ONDC) is a network based on open protocol and will enable local commerce across segments, such as mobility, grocery, food order and delivery, hotel booking and travel, among others, to be discovered and engaged by any network-enabled application.

The platform aims to create new opportunities, curb digital monopolies and by supporting micro, small and medium enterprises and small traders and help them get on online platforms. It is an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.

India is moving ahead with Open Network for Digital Commerce (ONDC) to provide an e-marketplace alternative to proprietary e-commerce.

The Indian E-Commerce Industry is valued at around 40 billion. The industry is still in its nascent stage. However, Indian digital consumerism is growing at a faster speed and is expected to reach $200 billion by 2027.

It is an initiative aimed at promoting open networks for all aspects of exchange of goods and 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. It is being developed as a counter to the current duopoly in the Indian e-commerce market which is largely dictated by Amazon and Walmart-owned Flipkart.

For the uninitiated, ONDC is a platform-agnostic e-commerce system, wherein all kinds of vendors, sellers, and merchants (big and small) can display their offerings. With ONDC, India envisions a truly decentralized, coherent, and integrated system for e-commerce, which can be used by everyone.

When a buyer searches for an item on the Paytm app, from where ONDC has gone live, the app will connect to the ONDC platform, which will connect it to seller side interfaces that will list all the companies from where you can buy the particular item. On ONDC, there will be several other backend partners such as logistics service providers, enterprise resource planners, e-commerce store hosting service providers, etc.

As per the government estimates, ONDC will be deployed in 100 Indian cities by October 2022. It will directly positively impact 30 million sellers and 10 million vendors. It will also help the buyers by giving them a more democratized digital platform and finding better bargains and options.

ONDC’s reach will be far and wide. It would not just be limited to general retail, grocery, etc. It can also entail visible shifts in lifestyle retail in India. India’s lifestyle retail is sized at around $120 billion. This includes footwear and apparel, small appliances, fashion, personal care, home décor and ambiance products, etc.

ONDC can give a positive push to the overall lifestyle segment. It will unlock new opportunities for mid-sized vendors of lifestyle products and help them reach a larger audience. Likewise, it will spur faster digitization for vendors that are mostly relying on the offline model.