After launching services in Bengaluru, the Open Network for Digital Commerce (ONDC), a government-backed project that aims to give small businesses and mom-and-pop shops access to procedures and technologies typically used by major e-commerce platforms like Amazon and Flipkart, is anticipated to extend beta testing in Delhi.
An initiative known as ONDC seeks to advance open networks for all facets of trade in goods and services over digital or electronic networks. It will be built using open-sourced methodology, independent of any particular platform, and using open specifications and open network protocols. It is being created to compete with the two dominant players that currently control a large portion of the Indian e-commerce market, which is dominated by Amazon and Walmart-owned Flipkart.
The Department for Promotion of Industry and Internal Trade (DPIIT) launched a test of ONDC in May of this year, with plans to onboard 150 sellers in cities like Delhi-NCR, Bengaluru, Coimbatore, Bhopal, and Shillong. The services went live across 16 pin codes in Bengaluru on September 30.
According to reports, ONDC plans to extend beta testing into regions where its network participants have significant delivery and logistics footprints and where these players have the capacity to be deployed. In addition, it is anticipated that the initial segments will focus on fashion, home decor, and electronics.
The interfaces hosting the buyers and sellers are separated by the ONDC platform. Currently, Paytm hosts the buyer side interface, while GoFrugal and other competitors host the seller side interface. The Paytm app, from which ONDC has launched, will connect to the ONDC platform when a buyer searches for an item, and the platform will connect it to seller side interfaces that list all the businesses from which you can buy the specific item. There will be a number of additional backend partners on ONDC, including logistic service providers, enterprise resource planners, hosting services for online stores, etc.
The growing dominance of international players in India’s e-commerce ecosystem was noted in an ONDC strategy paper released earlier this year. It also noted that the high investment required to create alternatives to the integrated solutions provided by the big players has turned into a barrier to entry for digital marketplaces. Given that the value these small players create is stored with the larger platforms, it also raised the issue of marketplace sellers’ inability to leave the platform ecosystem.
In light of this, ONDC seeks to transform the marketplace ecosystem from an operator-driven platform-centric model to an interoperable, decentralised network that is driven by facilitators. Additionally, according to news reports, only 600 orders were placed for the ONDC launch in Bengaluru between September 30 and October 6. Industry participants also highlight a number of flaws in the arrangement, such as the lack of clarity regarding data handling, end-to-end links, and supplier liability.
