How ONDC seeks to democratize digital  commerce

What is the News?

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. 

Moreover, 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.

Source: This post is based on the article “How ONDC seeks to democratize digital  commerce” published in Livemint on 27th October 2021.