Open Network for Digital Commerce: What does it mean and how will it work?

ONDC, which is being developed to tackle the duopoly of Amazon and Flipkart in the Indian e-commerce market, will use open specifications and network protocols independent of any one platform

The Indian government is beta testing the Open Network for Digital Commerce (ONDC) and might launch the platform by the end of September. It will be linked with one district, one product (ODOP).

Commerce minister Piyush Goyal said that it would bring 60 million small stores onto one platform, according to a report by the Times of India (TOI). It will also help small companies to compete with big firms in the marketplace.

What is ONDC?

Open Network for Digital Commerce (ONDC) aims to provide open networks for all aspects of exchanging goods and services over digital or electronic networks. The platform, which is being developed to tackle the duopoly of Amazon and Flipkart in the Indian e-commerce market, will use open specifications and network protocols independent of any one platform.

It will work as a link between the buyer and the seller when the demand for a particular product is raised.

How will ONDC work?

When a buyer searches for any product on a platform like Paytm, the app will connect to the ONDC platform. ONDC will then list the companies from where the item can be bought.

The buyer-side hosts and seller-side hosts depend on the platform on which the shopping is done. ONDC will not depend on a particular platform. It will give a chance to small retailers to sell their products on the shopping app.

It aims to change the market from an operator-driven ecosystem to a facilitator-driven network. The authority to onboard the sellers will be taken away from e-commerce platforms to ONDC.

Which companies have joined ONDC?

It is currently being run as a pilot launch in Delhi, Bengaluru, Coimbatore, Shillong, and Bhopal. For now, Paytm has been chosen as the buyer app. For sellers, several platforms like Gofugal, Digiit, and Growth Falcon have been roped in.

It is also in the advanced stages of discussion with Dunzo, PhonePe, and Reliance Retail. Microsoft has already decided to become a part of the network. According to an Indian Express (IE) report, Amazon and Flipkart may join ONDC soon.