{"id":245277,"date":"2023-05-29T21:01:09","date_gmt":"2023-05-29T15:31:09","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=245277"},"modified":"2023-05-29T21:01:09","modified_gmt":"2023-05-29T15:31:09","slug":"is-ondc-really-the-upi-of-e-commerce","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/is-ondc-really-the-upi-of-e-commerce\/","title":{"rendered":"Is ONDC really the UPI of e-commerce?"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article\u00a0\u201cIs ONDC really the UPI of e-commerce?<\/strong>\u201d published in Mint <\/strong>on\u00a029th<\/sup> May 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS 3 \u2013 Indian Economy \u2013 Digital Economy<\/strong><\/p>\n

Relevance: <\/strong>concerns associated with Open Network for Digital Commerce (ONDC) platform.<\/p>\n

News<\/strong>: The article explains the concerns associated with Open Network for Digital Commerce (ONDC).<\/p>\n

What is ONDC?<\/strong><\/h2>\n

Click here to Read<\/strong><\/a><\/p>\n

After the success of UPI, a hype is being created for ONDC that it will revolutionize e-commerce like UPI did with the payment system. However, the situation is different for both.<\/p>\n

Why is it inappropriate to compare ONDC to UPI?<\/strong><\/h2>\n

Before the launch of the UPI, all debit-based transactions were through a combination of cash exchange, online bank transfers, debit cards, etc. Even before UPI, people hardly used credit cards for payments.<\/p>\n

Therefore, the launch of UPI made debit-based transactions easier by leveraging technology.<\/strong> UPI did not compete with any such big players in the market<\/strong>. It only made the existing payment system technology driven.<\/p>\n

So, comparing ONDC with the UPI that it will democratize e-commerce by providing technology to the small players, which then will be able to compete with the big e-commerce companies is inappropriate.<\/p>\n

What are the challenges with ONDC?<\/strong><\/h2>\n

Making Profit:<\/strong> It is argued that ONDC will ensure competitiveness in the market by ending the monopoly of the big e-commerce companies. However, in reality even these big companies suffer in being a profitable.<\/p>\n

For instance,<\/strong> it is viewed that platforms like Swiggy and Zomato are exploiting their duopoly power to create super-profits for themselves. However, for the fiscal year 2022, both reported losses.<\/p>\n

Hence, even for the ONDC, it cannot be said that it will make huge profits by eliminating monopoly from the market.<\/p>\n

Relying on Marketplace Model:<\/strong> One of the aims of ONDC is to create several new vertical marketplaces. However, large e-commerce companies like Amazon have shifted from the marketplace model to a \u2018full-stack model\u2019 or into a platform<\/strong>.<\/p>\n

This is because the marketplace lacks standardization<\/strong> of pricing, payment terms, logistics, packaging, service levels, returns, resolution of customer complaints, etc.<\/p>\n

Therefore, for ONDC, reversal to a marketplace model will bring back all the problems that were inherent in that model.<\/p>\n

Ensuring a level playing field:<\/strong> It is argued that ONDC will ensure a level playing field by allowing small sellers to sell their products online.<\/p>\n

However, concerns remain over the efficiency of the ONDC<\/strong> that how it will make the economic chain efficient while also offering a small player the opportunity to deliver their products to customers in their locality.<\/p>\n

Moreover, some people still prefer shopping offline and most small players do not even target customers who care for the convenience of home delivery.<\/p>\n

So, any solution that focuses on home delivery is unlikely to benefit smaller players<\/strong> because they can never beat the e-commerce companies on this.<\/p>\n

Therefore, imitating the models of the bigger players is probably not the answer because what has worked for them may not work for others.<\/p>\n

What can be the way ahead?<\/strong><\/h2>\n

Any such new idea that aims to revolutionize requires fundamental change<\/strong> rather than following the same pattern. Else, similar problems will exist like other e-commerce companies.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article\u00a0\u201cIs ONDC really the UPI of e-commerce?\u201d published in Mint on\u00a029th May 2023. Syllabus: GS 3 \u2013 Indian Economy \u2013 Digital Economy Relevance: concerns associated with Open Network for Digital Commerce (ONDC) platform. News: The article explains the concerns associated with Open Network for Digital Commerce (ONDC). What… Continue reading Is ONDC really the UPI of e-commerce?<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[9],"tags":[216,11125],"class_list":["post-245277","post","type-post","status-publish","format-standard","hentry","category-public","tag-gs-paper-3","tag-mint","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/245277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=245277"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/245277\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=245277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=245277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=245277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}