ONDC is a Indian government initiative aimed at transforming India’s e-commerce market from a platform-centric model to one based on open networks.
With the ONDC, buyers and sellers can conduct transactions regardless of which platform they use, similar to the success of the Unified Payments Interface (UPI).
Let’s take an example
Let’s say you want to purchase a smartphone online. Your Amazon account is registered, but Flipkart’s price for the same smartphone you want is better. Due to the current system, you could not purchase it on Flipkart because you are not registered there.
On the other hand, ONDC is like a giant network connecting all the different e-commerce platforms. The advantage is that you don’t need to be limited to one specific platform to purchase products, even if you are only registered on one.
Democratization and decentralization of e-Commerce; Accessibility for sellers and consumers; and lowering the price of goods and services
The advantages of ONDC
- E-commerce operators should have a level playing field
- MSMEs and traders have greater access to digital markets
- Promotes competition and innovation in a variety of industries
- Democratizing e-commerce and offering alternatives to proprietary e-commerce sites will increase consumer choice.
- Provides a neutral and regulated platform
- Openness, interoperability, and innovation are promoted
- Makes the process more transparent and accountable
Challenges of ONDC
- Implementation complexity in terms of technology
- E-commerce companies lose customers when they switch from established platforms
- In today’s platform-centric e-commerce model, sellers can already list their products across various e-commerce platforms.
- A variety of private websites offer limited benefits, such as price comparisons, that assist buyers in making better decisions.
- There is a lack of clarity on how to address complaints and returns from customers
- ONDC is not welcomed by major e-commerce players such as Amazon and Flipkart because they cannot maintain control, existing dominance, competitive disadvantage, infrastructure challenges, and pricing/policies control.
Conclusion and the way forward:
ONDC’s success will be determined by the efficiency of listing products from various sellers and maintaining the quality of services. In addition to providing a single window for issue resolution, the government should create a better digital space, implement a digital education policy, and conduct a well-funded adoption campaign.