ONDC! ONDC! ONDC! What is ONDC? How will it help India? What are its benefits?

I know you have several questions like these in your mind.

Sit right, sip some coffee, and let me tell you all about this latest buzzword!

Are you a business owner? Or a trader? Do you own a micro, small, or medium-sized enterprise?

If yes, then ONDC can be helpful for you to get an online platform to list and sell your products and services. You can also connect with your potential buyers.

Or if you’re a consumer, ONDC can help you find certain products and services cheaper than anywhere else. You must have already heard about the effect on Zomato & Swiggy.

ONDC can be a surplus to the Indian e-commerce value chain. Here’s all you need to know!

E-Commerce Industry in India

In the last few years, India has seen a vast increase in the usage of smartphones and the Internet.

The number of internet connections in 2021 increased significantly to 830 million, driven by the ‘Digital India’ programme.

Yet, the majority of Indian internet users are unaware of digital commerce platforms and the way to use them correctly.

Indian e-commerce market could outpace more mature markets to become the third largest in the world with US$350 billion by 2030. (Source: https://www.ibef.org/industry/ecommerce)

The Indian online shopping market stands third globally, with 14 crore e-retail shoppers since 2020, only behind China and the US.

What’s the hurdle then? What is stopping people from getting digitally active? ‘Digital literacy’ can be promoted in rural India by providing easier ways to transact digitally. And that’s where ONDC comes in.

The Government of India has now come up with a solution to develop open networks for e-commerce; called ONDC (Open Network for Digital Commerce).

What is ONDC?

ONDC: Indian Open Network for Digital Commerce is a government-supported digital platform aimed to enable small merchants and consumers to get them on online platforms.

ONDC is an initiative by the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry (DPIIT) of the Government of India to develop open e-commerce.

It was founded back in April 2022. ONDC is a network of various small and large-scale e-commerce players to access processes and technologies by large e-commerce platforms like Flipkart, Amazon, Zomato, Swiggy, etc.

You can discover the true potential of ‘Open Protocol‘ for an efficient & inclusive e-commerce landscape with ONDC.

ONDC in India

As discussed, ONDC India is a private non-profit Section 8 company formed by the Department for Promotion of Industry and Internal Trade (DPIIT) of the Government of India to develop open e-commerce.

ONDC has been soft-launched in 5 cities – Delhi NCR, Bengaluru, Bhopal, Shillong, and Coimbatore as of May 2023.

Companies including Microsoft, Meesho, Paytm, and Dunzo have already joined the platform. Amazon shall join India’s ONDC network in due time.

How does ONDC work?

ONDC is an open digital network unlike Amazon or Flipkart but like a gateway, where buyers and sellers across different platforms will be able to connect.

• All buyers and sellers will be connected through ONDC
• A transaction can be fulfilled by multiple servers operating independently on the network

ONDC helps to create new opportunities by supporting micro, small, and medium enterprises, and small traders to get them on online platforms.

It is a ‘platform-centric digital commerce model’ where the buyer and seller use a similar platform to be digitally visible and perform a business transaction.

ONDC rules will standardize operations like cataloging, inventory management, order management, and order fulfillment.

This will help small businesses use any ONDC-compatible applications. Also, it will emphasize users to go digital.

Currently, Amazon and Flipkart control more than 60% of India’s e-commerce market. ONDC can change this scenario if it becomes successful in achieving its target.

Who can join ONDC India?

All Indian enterprises can take advantage of the e-commerce platform thanks to the ONDC network.

The only factor that matters in ONDC’s open network is the level of service rendered.

If you can provide high-quality service that fits your selected ONDC function, you can be successful!

ONDC is not an application to be downloaded. It is integrated into apps such as Paytm, PhonePe’s Pincode, and Magicpin. 

You can order products and services as you do on e-commerce apps. Sellers use their own delivery and logistics on ONDC to fulfill the orders.

How to apply for ONDC?

Are you a seller? Do you have your own business? Then you can start selling on ONDC!

Here are the steps:

• Onboard with a reputed seller platform like Paytm
• Add GSTIN of the business you want to list with ONDC
• Add contact details of authorized business personnel
• Add bank account details
• Sign the onboarding agreement

Still not getting the process? Read more.

Benefits of Open Network for Digital Commerce (ONDC)  

• Consumers can access and become more friendly with e-commerce platforms by using ONDC
• Consumers can find sellers, products, or services of their choice
• Consumers’ demands can match with the nearest local seller
• The digital market will accommodate Micro, Small, and Medium Enterprises (MSMEs)
• ONDC will increase the trade of locally manufactured goods in India and multiply investments of MSMEs
• It will help digital literacy flourish throughout India

Future of ONDC in India 2023 and Ahead

1. The ONDC aims to boost e-commerce penetration in the coming two years to 25% of India’s consumer purchase ratio, from nearly 8%.

2. ONDC aims to register 900 million buyers and 1.2 million sellers within the next five years while achieving a gross merchandise value of $48 billion.

3. Sellers can connect with the logistics firm to deliver their goods locally.

4. The Indian government is trying to tap thousands of small businesses that lack digital expertise. This can happen through digital literacy campaigns.

5. Microsoft is the first tech MNC to join the government-backed Open Network for Digital Commerce.

What are the challenges of ONDC?

• Smaller business owners can find it difficult to compete with the e-comm giants like Amazon & Flipkart
• The possibility of mismatched payments can lead to transactional issues
• The lack of digital literacy can hamper the growth and pace of ONDC

Final takeaways:

ONDC is an open network for all the people who can sell or enable selling in an e-commerce setup.

Buyers’ purchase journeys aren’t controlled by single entities.

Customers can access sellers on ONDC through any app that is partnered with the network.

The government of India needs to run digital literacy awareness campaigns to help users to participate in the digital revolution actively.

It’s time to go digital! Are you ready for digital commerce? If you find this blog fruitful, do let us know in the comments!

Written by Ashay Chandekar from Deshpee. Images have the copyrights of the respective sources.