WHAT IS Open Network for Digital Commerce (ONDC)?
Open Network for Digital Commerce (ONDC) is a network based on an open protocol that will allow any network to discover local commerce in segments such as mobility, groceries, food ordering and delivery, hotel and travel reservations, among others, and can be enabled application used.
The platform aims to create new opportunities to curb digital monopolies and support micro, small and medium-sized enterprises and small traders and facilitate their entry into online platforms. This is an initiative of the Department for the Promotion of Industry and Domestic Trade (DPIIT).
Characteristics of the Open Network of Digital Commerce (ONDC)
Open Network for Digital Commerce (ONDC), an eCommerce PIU, seeks to democratize digital or electronic commerce, moving it from a platform-centric model to an open network. Through the Open Network for Digital Commerce (ONDC), merchants can store their data to build credit history and reach consumers.
The proposed government-backed platform aims to level the playing field for e-commerce giants like Amazon, Flipkart and offline retailers who have complained about unfair business practices by these online retailers. The platform will also comply with the Information Technology Act 2000 and will be designed to comply with the new Data Protection Act.
In this system, the ONDC plans to enable sellers and buyers to be digitally visible and transact on an open network, regardless of the platform or application they use. It will also enable merchants and consumers to break down silos to form a single network to drive innovation and scale, transforming everything from retail to food to mobility.
The new framework aims to promote open networks developed using an open source methodology, using open specifications and open network protocols independent of any particular platform. It must digitize the entire value chain, standardize operations, encourage supplier participation, achieve logistics efficiencies and increase value for the consumer.
According to the official government statement, the Open Network for Digital Commerce must take all measures to guarantee the confidentiality and protection of data on the network. The ONDC does not require participants to share transaction-level data with the ONDC. You will work with your participants to publish aggregated and anonymous network performance metrics without compromising confidentiality and privacy. Currently, the ONDC is in a pilot phase and the government has appointed a nine-member advisory board, including Nandan Nilekani of Infosys and the chief executive of the National Health Authority, RS Sharma, on the actions. necessary to shape and accelerate adoption.
Benefits of Open Network for Digital Commerce E (ONDC)
Today, anyone with a Google Pay account can send money to someone else using PhonePe as they both use the Unified Payments Interface or UPI platform. The government is planning a similar experiment in e-commerce, which is currently dominated by Amazon and Flipkart. The ONDC also promises a level playing field for small retailers.
Its proponents say the ONDC will move Indian e-commerce away from the current platform-centric model dominated by market leaders Amazon and Flipkart towards an open network.
It does this by keeping various operational aspects such as vendor onboarding, vendor discovery, pricing discovery, and product cataloging open source. This allows more and more traditional retailers to benefit from selling their products online and compete with big e-commerce companies.
Eventually, the Open Network for Digital Commerce aims to cover everything from clothing to food delivery to mobility. From what we know so far, the ONDC will mean creating a separate digital platform with simpler processes for seller onboarding. So, for example, if a shopper searches for a white shirt, they will find the products hosted on Amazon and Flipkart. And you will also find that the white shirt is sold in local stores near you.
The ONDC aims to give offline retailers an edge by helping them compete with online retailers, thus encouraging hyper-local delivery. For sellers, the Open Network for Digital Commerce means their products can be seen across multiple e-commerce sites without having to register separately on each platform.
In fact, there are too many things to check in ecommerce to ensure a good customer experience. Did the consumer receive the product they paid for? Did it arrive in one piece? Was the product real or fake? And so. For this, e-commerce platforms invest a lot of money in their platforms, develop proprietary technologies that prioritize sellers who can fulfill orders most efficiently.
Buyers buy regularly on all platforms. And sellers also list their products on various e-commerce websites. In fact, most e-commerce sellers trade on multiple platforms at the same time, including Amazon, Flipkart, Snapdeal, etc. It therefore remains to be seen whether the government can create a platform that works well and offers consumers and sellers alternatives.
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