Open Network for Digital Commerce(ONDC):
The Department for Promotion of Industry and Internal Trade(DPIIT) is building an Open Network for Digital Commerce(ONDC) which is designed to curb digital monopolies and standardize the on-boarding of retailers on e-commerce sites.
What is the aim of ONDC?
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The Unified Payment Interface (UPI) has disrupted the digital payments’ domain. ONDC seeks to achieve something similar for e-commerce.
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It aims to democratise digital commerce by moving it away from platform-centric models like Amazon and Flipkart to an open network.
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This will enable more sellers to be digitally visible. The transactions will also be executed through an open network.
How would ONDC work?
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ONDC network may make it easier for a small retailer to be discovered. Once a retailer lists its products or services using the ONDC open protocol, the business can be discovered by consumers on e-commerce platforms that follow the same protocol.
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A consumer searching for the product can see the location of the seller and opt to buy from the neighbourhood shop that can deliver faster compared to an e-commerce company.
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This may promote hyperlocal delivery of goods, such as groceries, directly from sellers to consumers.
What issues does the ONDC seek to address?
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Currently, Indian digital businesses are dominated by a few established players such as Amazon, Flipkart, Zomato, and Swiggy.
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Both consumers and the goods/service providers depend on these platforms to connect.
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Often e-commerce platforms push their own white-labelled products at the expense of third-party sellers.
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The ONDC wants to break the digital barriers between consumers and retailers by doing away with the intermediary.
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The ONDC protocols may also standardize operations.
