Open Network for Digital Commerce(ONDC) : Analysis – UPSC GS3

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?
  • The Unified Payment Interface (UPI) has disrupted the digital payments’ domain. ONDC seeks to achieve something similar for e-commerce.
  • It  aims  to  democratise digital commerce by moving it away from platform-centric models like Amazon and Flipkart to an open network.
  • This will enable more sellers to be digitally visible. The transactions will also be executed through an open network.
How would ONDC work?
  • 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.
  • 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.
  • This may promote hyperlocal delivery of goods, such as groceries, directly from sellers to consumers.
What issues does the ONDC seek to address?
  • Currently, Indian digital businesses are dominated by a few established players such as Amazon, Flipkart, Zomato, and Swiggy.
  • Both consumers and the goods/service providers depend on these platforms to connect.
  • Often e-commerce platforms push their own white-labelled products at the expense of third-party sellers.
  • The ONDC wants to break the digital barriers between consumers and retailers by doing away with the intermediary.
  • The ONDC protocols may also standardize operations.

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