Open network for e-commerce: Beneficial for sellers and consumers?

Today, someone having a Google Pay account can send money to another person who uses PhonePe, because both are using the common Unified Payments Interface or UPI platform. The government is planning a similar experiment in the e-commerce space, which is currently dominated by Amazon and Flipkart. Open Network for Digital Ecommerce, or ONDC, promises to provide a playing field to small merchants too.    

Its proponents say that ONDC will move Indian ecommerce away from the current platform-centric model, dominated by market leaders Amazon and Flipkart, to an open network.

It will do so by making several operational aspects like onboarding of sellers, vendor discovery, price discovery and product cataloguing open source. That will allow more and more traditional retailers to benefit from selling their wares online and compete with large e-commerce firms.

It is envisaged that ONDC will eventually cover everything from clothes to food delivery to mobility. From what we know so far, the ONDC will mean the creation of a separate digital platform with easier processes for onboarding sellers. So, if a buyer is looking for, say, a white shirt, they will find the products hosted on Amazon and Flipkart. And they will also find the white shirt being sold by local shops in their neighbourhood. 

ONDC is expected to give a leg-up to offline retailers, helping them compete with online sellers, thus boosting hyperlocal deliveries. For sellers, ONDC will mean their products becoming visible on multiple e-commerce websites without them having to register on each platform separately.

As Bloomberg columnist Andy Mukherjee pointed out, drawing parallels between ONDC and UPI or Email may be a little simplistic.

This is because there are too many things that need to be checked in ecommerce to ensure a good experience for the customer. Did the consumer get the product they paid for? Did it arrive in one piece? Was the product genuine or fake? And so on. For this, ecommerce platforms invest huge money in their platforms, develop proprietary technologies that prioritise sellers who can fulfil orders in the most efficient way.

Buyers routinely shop from across the platforms. And sellers list their products across various e-commerce sites too. In fact, most ecommerce sellers are simultaneously trading through multiple platforms, including Amazon, Flipkart, Snapdeal, etc. So it is yet to be seen if the government is able to come up with a platform which works seamlessly and offers alternatives to consumers and sellers.

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