ONDC: The Future of E-Commerce in India?

The e-commerce landscape in India is rapidly evolving, with traditional brick-and-mortar retail pivoting towards a digital future. One of the latest initiatives to revolutionize this industry is the Open Network for Digital Commerce (ONDC). As the nation embraces technology and moves towards digital transformation, it is crucial to understand the potential impact of ONDC on the future of Indian e-commerce. This article will explore ONDC, its key components, and how it could transform India’s e-commerce landscape.

What is ONDC?

Open Network for Digital Commerce (ONDC) is an initiative by the Government of India aimed at creating an open platform for all stakeholders involved in digital commerce. The project is supported by the Department of Promotion for Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, known for driving similar projects related to digital adoption in India. It was released for the public on 31 December 2022 with the initial investment from Quality Council of India and Protean eGov Technologies Limited. 

Designed to democratize e-commerce, ONDC aims to break down entry barriers for small and medium-sized businesses by providing a cost-effective way to sell products online. This platform encourages fair competition, transparency, and inclusiveness by allowing collaboration among various market players and facilitating seamless interactions between retailers, customers, and suppliers.

The Future of E-commerce in India with ONDC:

1. Leveling the playing field: The primary goal of ONDC is to create an even playing field for small business owners and developers. This platform would level competition between newcomers and established giants, allowing everyone access to a broad customer base without having to develop expensive infrastructure.

2. Increasing transparency: By creating a unified platform that promotes healthy competition, ONDC would foster transparency among various marketplace players. It eliminates product listing biases on different platforms by standardizing rules for sellers across all marketplaces.

3. Empowering small businesses: As ONDC enables easy onboarding for small and medium-sized enterprises (SMEs), it reduces the barriers to entry for those looking to expand their businesses online. This could lead to significant growth for SMEs in previously untapped markets.

4. Reducing costs for consumers: As ONDC encourages competition, this could eventually lead to lower prices for consumers, as sellers would try to offer better deals to remain competitive in the market.

5. Strengthening data privacy: Shopping data collected by ONDC is expected to be more secure than traditional platforms, as the platform will promote data standardization and protection practices.

Other side of ONDC

1. Complexity: ONDC is a complicated component when contrasted with different frameworks like UPI. The ease of use of UPI attracted people, who adopted it. ONDC might not be any different.

2. People are already accustomed to the existing company’s users interfaces and a rise in disagreements: Only the buying and selling process takes place online in ONDC; product delivery and use take place offline. Since ONDC is not an intermediary platform, this may result in additional disputes.

3. Absence of a Strong Complaint Redressal System: People may be discouraged from joining the platform due to the confusion surrounding who is in charge of providing customer service and handling complaints.

4. Not a simple undertaking: Through their lucrative and interoperable services, the existing e-Commerce companies have strengthened their relationships with customers. Similar to how Amazon offers its streaming platform in addition to its Prime membership. As a result, it won’t be easy for the ONDC to get customers.

5. Services and goods may not be significantly cheaper: It’s possible that ONDC won’t be able to offer products in the same way that other players can because it acts as a facilitator of trade between buyers and sellers. For Instance, Amazon has tied up ICICI bank to give 5% cashback on products bought through Amazon ICICI Visa.

How can this be tackled?

• To compete with the dominant e-commerce platforms, the government must construct a better digital environment for e-commerce. Alongside this, making a legitimate computerized instruction strategy that considers different dialects and easy to use interface to serve the purchasers as well as sellers is significant.
• To attract new small sellers like kirana stores to the platform, a large, well-funded adoption campaign will be required.
• The interest and supply sides ought to have the option to get to a tied down single window to determine issues like data lopsidedness, murky evaluating, quality worries, and purchaser dealer questions.
• Appropriate Complaint Redressal Component: To navigate issues on both the demand and supply sides, such as information asymmetry, opaque pricing, concerns about product quality and safety, and conflict between buyers and sellers, there ought to be a secure single window.

The Open Network for Digital Commerce has the potential to reshape India’s e-commerce landscape. By increasing inclusivity, empowering small businesses, and encouraging competition, ONDC could lead India towards a more unified and prosperous digital future. As the initiative gains traction and evolves over time, ONDC is poised to become a cornerstone of India’s journey towards becoming a truly connected and digitally empowered nation.

FAQs

1. What does ONDC stand for?

Ans – Open Network for Digital Commerce (ONDC)

2. Is ONDC a public or private platform?

Ans –  ONDC is an initiative by the Government of India, under the Ministry of Commerce and Industry, known for driving similar projects related to digital adoption in India.

3. What is the basic aim of this online platform?

Ans – This platform is designed to democratize e-commerce. ONDC aims to break down entry barriers for small and medium-sized businesses by providing a cost-effective way to sell products online. 

4. How is ONDC helping the Government of India?

Ans –  It will eliminate competition between the newcomers and the big established giants. It will also encourage small and medium size enterprises (SMEs) to participate without any expensive infrastructure. There will be healthy competition. Consumers will also get a trustable and wider variety of goods.

5. Is ONDC the future of E-commerce?

Ans – ONDC is a government  based platform that was introduced in the Indian market on 31st December, 2022. It is still in its initial phase where people are getting a hang of its complexity. Being an ecommerce site it also lacks a proper complaint redressal system making it little hard for the customers to rely on it blindly. But its relatively cheap goods and wide varieties of product tends to outweigh its drawbacks. Thus, it can lead India’s E-commerce sector in the near future.