Discover ONDC (Open Network for Digital Commerce), India’s transformative initiative aimed at creating an open e-commerce ecosystem. Learn about its technologies, benefits for buyers and sellers, and how it empowers small businesses while reshaping the digital commerce landscape.
What is ONDC?
ONDC (Open Network for Digital Commerce) is a government-backed initiative that aims to create an open and interoperable e-commerce ecosystem in India. It establishes a direct connection between buyers and sellers while eliminating intermediaries, promoting fair competition and empowering small businesses.
How does ONDC work?
ONDC uses open standards and protocols to enable seamless transactions between buyers and sellers across different platforms . It allows businesses of all sizes to directly engage with consumers, regardless of the platform they use.
Benefits of ONDC
- Increased choice and competition for buyers
- Access to a wider market and better discoverability for sellers
- Lower commissions and elimination of intermediaries
- Enhanced efficiency and transparency in the e-commerce ecosystem
- Personalized recommendations and a seamless shopping experience for buyers
- Opportunity for small businesses and startups to compete on an equal footing
ONDC Pilot and Expansion
ONDC is currently running pilot programs in 5 cities: Bengaluru, New Delhi, Coimbatore, Bhopal, and Shillong. It aims to reach around 100 cities by August 2024 and open it to a wider public in the current 5 cities.
ONDC’s Transaction Targets
ONDC targets to raise e-commerce reach in the next 2 years to 25% of India’s consumer purchases, from 8% currently. It aims to sign up 900 million buyers and 1.2 million sellers on the shared network within the next 5 years, while achieving a gross merchandise value of $48 billion.
Who can join ONDC?
ONDC is open to businesses of all sizes, including small and medium enterprises, startups, and large enterprises. Sellers can join the network by integrating with ONDC-compatible platforms, while buyers can access the network through various buyer applications.
What technologies power the ONDC network
ONDC (Open Network for Digital Commerce) utilizes several key technologies to power its open e-commerce network:
- Open standards and protocols: Open Network for Digital Commerce uses open specifications and protocols to enable seamless transactions between buyers and sellers across different platforms.
- Free and open source software: This E-commerce platform employs a “free software methodology” and open source components in its technology stack.
- Buyer, seller and logistics registries: Microsoft and Oracle are working on developing registries for buyers, sellers and logistics providers on the ONDC network.
- Network reputation index: Oracle is designing a neutral and transparent reputation index for sellers on this platform to build trust.
- Online dispute resolution: An online dispute resolution framework is being developed to handle disputes between network participants.
- Seller toolkit: Microsoft is providing a toolkit to ease the onboarding process for sellers joining ONDC.
- Payment reconciliation: Razorpay is integrating a payment reconciliation service to provide a single view of all transactions with an audit trail for documentation.
- Social commerce: Microsoft plans to introduce social commerce features on this e-commerce platform and launch a shopping app for price discovery.
So in summary, Open Network Digital Commerce leverages open standards, registries, reputation systems, dispute resolution, seller tools, payments and social features – all built on open source software – to create an interoperable e-commerce ecosystem in India.
Conclusion
ONDC has the potential to revolutionize the e-commerce landscape in India by promoting fair competition, empowering small businesses, and providing a seamless shopping experience for buyers. As the initiative continues to expand and gain traction, it will be interesting to see how it impacts the e-commerce market and the overall digital commerce ecosystem in the country.
