Can ONDC Democratize e-commerce eco-system?

The Open Network for Digital Commerce (ONDC) is a government-backed initiative in India that aims to create a unified open platform for all kinds of e-commerce transactions. It is designed to be a more open and transparent alternative to the current e-commerce landscape, which is dominated by a few large players.

ONDC employs cutting-edge digital infrastructure, seeking to democratise digital commerce in India and make it more accessible and inclusive. More than 29,000 sellers are live on the network, and alpha tests are currently running in 236 cities.

ONDC has the potential to address some of the key concerns that users have with the current e-commerce landscape. For example, it could help to reduce prices by increasing competition. It could also make easier for small businesses to participate in e-commerce, which could lead to a wider range of products and services being available to consumers.

ONDC, with its network-centric approach and inclusive governance framework, will transform the digital commerce landscape in India and serve as an important reference point for a forward-looking Digital Public Infrastructure governance framework.

ONDC has been endorsed by the Department for Promotion of Industry and Internal Trade (DPIIT)under the Union Ministry of Commerce and Industry. DPIIT is not involved in ONDC’s funding, but is at the forefront of its evangelisation through light-touch governmental oversight.

However, there are also some challenges that ONDC will need to overcome in order to be successful. One challenge is that it will need to gain the trust of users. This will require ONDC to be transparent about how it operates and to ensure that it protects user data. Another challenge is that ONDC will need to be able to compete with the existing e-commerce platforms. This will require ONDC to offer a compelling value proposition to users.

One potential revenue stream could include charging a small fee from platforms to fund ongoing and expansion-related activities independently. This approach draws on lessons learned from the limitations of UPI, which was heavily reliant on government subsidies as a revenue stream.

ONDC will need to be transparent about how it operates and to ensure that it protects user data.

ONDC will need to offer a compelling value proposition to users in order to compete with the existing e-commerce platforms.

ONDC will need to be easy to use for both buyers and sellers. If ONDC can address these challenges, it has the potential to be a major player in the Indian e-commerce market. Overall, ONDC has the potential to democratize the e-commerce ecosystem in India. It will make easier for small businesses and retailers to participate in the market, reduce the cost of e-commerce for consumers, and improve the transparency of the market. However, it will need to overcome the challenges in order to be successful.

S Mohini Ratna, Editor, VARINDIA