Addressing the challenges in new-age digital commerce

Source: The post is based on the article “Addressing the challenges in new-age digital commerce” published in The Hindu on 6^th August 2022.

Syllabus: GS 2 – E-governance applications, models, successes, limitations, and potential.

Relevance: About the need for Online Dispute Resolution(ODR).

News: The novel coronavirus pandemic has further accelerated the process of digital inclusion. The rise in smartphone use fuelled by affordable data plans has catalysed an online revolution in the country.

For instance, the revolution has not only increased the routine to transact online but also learning online, having medical consultations online, and even resolving disputes online.

What are the challenges faced by small enterprises in digital inclusion?

Despite the rapid advancement small enterprises such as local Kirana stores have not gained from this. This is because, a) To sell on numerous platforms, sellers must maintain a separate infrastructure. This adds costs and limits participation, b) distinct terms and conditions of each platform limit the sellers’ flexibility, c) centralising digital commerce transactions on a single platform creates a single point of failure.

How Open Network for Digital Commerce (ONDC) will create a level playing field?

The ONDC began its pilot in five cities in April 2022, i.e., New Delhi, Bengaluru, Coimbatore, Bhopal and Shillong. Currently, the pilot has expanded to 18 cities, and there are immediate plans to add more cities.

India’s e-commerce industry is set to reach $200 billion by 2027, this shift from a platform-centric paradigm to the democratisation of the nation’s online market will catalyse the inclusion of millions of small business owners and kirana businesses.

What should be done to improve the ONDC?

It is important to ensure a positive dispute resolution experience. Hence, it is imperative to support the ONDC initiative with a modern-day, cost-effective, timely and high-speed dispute resolution system. This can be done by Online Dispute Resolution or ODR.

The need for ODR include, 1)  The ODR is not restricted to the use of legal mechanisms such as mediation, conciliation and arbitration in an online environment but can be tailormade for the specific use case keeping the participants in mind, 2)  The ODR can not only digitise the entire value chain but can also facilitate an enhanced user experience, 3) The ODR will help mitigate litigation risk and provide valuable insights into problems faced by consumers, 4) Consumers are provided with another choice for effective redress of their grievances, thereby building trust, confidence and brand loyalty.

How does the government is utilising ODR?

The governments, regulators and private enterprises have been adopting and encouraging its use. For instance, the National Payments Corporation of India (NPCI) has mandated platforms in the UPI ecosystem to adopt the ODR for complaints and grievances connected to failed transactions.

The other applications include, SEBI SCORES (SEBI COmplaints REdress System), RBI CMS (Complaint Management System), MSME Samadhaan (the Micro Small and Medium Enterprises Delayed Payment Monitoring System), and RTIOnline are other examples of ODR systems that are widely used in the country.

A customised ODR process can help achieve a steep five-year target of adding $48 billion in gross merchandise value to India’s e-commerce market and aid a network of 90 crore buyers and 12 crore sellers with the least hiccups.