Open Network for Digital Commerce

Recently, the government has launched the pilot phase of Open Network for Digital Commerce (ONDC) with an aim to “democratise” the country’s fast growing digital e-commerce space that is currently dominated by the two U.S.-headquartered firms — Amazon and Walmart.

• ONDC is a freely accessible government-backed platform that aims to democratise e-commerce by moving it from a platform-centric model to an open network for buying and selling of goods and services.
• Under ONDC, it is envisaged that a buyer registered on one participating e-commerce site (for example, Amazon) may purchase goods from a seller on another participating e-commerce site (for example, Flipkart).
• Presently, buyers and sellers have to be on the same app for a transaction which happens through the same platform. For example, a buyer needs to go to Amazon, to buy a product from a seller on Amazon.
• It is a not-for-profit organisation that will offer a network to enable local digital commerce stores across industries to be discovered and engaged by any network-enabled applications.

What is the Significance?

• On ONDC, buyers and sellers may transact irrespective of the fact that they are attached to one specific e-commerce portal. This could give a huge booster shot to smaller online retailers and new entrants.
• ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers.
• The platform envisages equal-opportunity participation and is expected to make e-commerce more inclusive and accessible for consumers as they can potentially discover any seller, product or service by using any compatible application/platform, thus increasing their freedom of choice.
• It will enable transactions of any denomination, thus making ONDC a truly ‘open network for democratic commerce’.
• Over the next five years, the ONDC expects to bring on board 90 crore users and 12 lakh sellers on the network, enabling 730 crore additional purchases.

READ MORE: Daily Prelims Booster

READ MORE: Daily News Analysis