The digital revolution has transformed how people engage in commerce globally, and India is no exception. With a large population and growing internet penetration, the Indian market offers immense potential for e-commerce growth. However, certain challenges such as monopolistic practices, data localization, and lack of interoperability hinder fully realizing this potential.
The digital commerce landscape is rapidly evolving, and the Indian government has introduced an ambitious initiative called the Open Network for Digital Commerce (ONDC). It aims to establish an open protocol that connects various stakeholders, including consumers, sellers, and service providers, to facilitate seamless transactions and data exchange.
In this article, we will explore the concept of ONDC, its objectives, how it works, the benefits it offers, as well as the challenges and concerns associated with its implementation.
In India, where more than 12 million sellers rely on selling or reselling products and services for their livelihood, the world of e-commerce has remained largely inaccessible. With only 15,000 of these sellers (merely 0.125% of the total) having embraced e-commerce, there is a pressing need for change. Small towns and rural areas, in particular, have struggled to tap into the potential of e-retail. However, the Online National Database of Commerce (ONDC) recognizes this as a unique opportunity to revolutionize e-commerce and unleash its full potential in India. With a mission to foster population-scale inclusion of sellers of all types and sizes, ONDC aims to dramatically increase e-commerce penetration in the country.
ONDC aims to help small retailers expand their business and reduce the dominance of e-commerce giants through an open, interoperable network on which buyers and sellers can transact without being present on the same platform.
Empowering Sellers for E-Commerce Success
Unlocking the Potential
ONDC understands that the key to achieving a thriving e-commerce ecosystem lies in empowering sellers and breaking down barriers. By bridging the gap between traditional commerce and online retail, ONDC seeks to enable millions of sellers to embrace the digital marketplace. This initiative holds immense promise, as it paves the way for economic growth and opens up new avenues for business expansion.
Small towns and rural areas are home to a significant portion of India’s population, yet they have faced limitations in terms of e-commerce access. ONDC aims to change that by providing these sellers with the necessary tools and resources to establish a strong online presence. Through education, training, and support, ONDC aims to empower sellers to navigate the digital landscape confidently. By doing so, it not only benefits individual sellers but also contributes to the overall economic development of these regions.
Revolutionizing E-Commerce Penetration
Creating an Inclusive Ecosystem
ONDC’s mission goes beyond just increasing e-commerce penetration. It strives to create an inclusive ecosystem where sellers from all backgrounds can thrive. By eliminating the existing barriers to entry, such as lack of digital literacy and access to technology, ONDC aims to level the playing field. This approach fosters diversity and enables a broader range of sellers to participate actively in the e-commerce revolution.
Driving Economic Growth
E-commerce has emerged as a powerful catalyst for economic growth, and ONDC recognizes its potential impact on India’s economy. By enabling population-scale inclusion of sellers, ONDC stimulates job creation, boosts income opportunities, and drives entrepreneurship. This virtuous cycle not only benefits individual sellers but also contributes to the overall economic prosperity of the nation.
Will ONDC be the game changer in the food delivery business?
India undeniably offers one of the finest food delivery services, providing users with the convenience of relishing their favorite meals from restaurants within minutes, all from the comfort of their homes. For a significant period, the food delivery technology landscape has been dominated by two prominent players, namely Zomato and Swiggy. These platforms have engaged in fierce competition, constantly striving to outdo each other by offering enticing deals and benefits to their users.
However, a formidable new contender has emerged in this realm, created by the Indian government itself. Known as the Open Network for Digital Commerce (ONDC), this platform enables restaurants to directly sell their food to consumers, eliminating the need for intermediaries like Zomato and Swiggy. Although ONDC was introduced in September 2022, it has recently witnessed a surge in popularity, gaining momentum as an alternative choice.
Recent reports reveal that ONDC has surpassed the impressive milestone of processing over 10,000 orders on a daily basis, indicating its growing acceptance among the public. Insightful sources suggest that approximately 40% of these orders originate from Bengaluru, while an equal proportion is contributed by metropolitan cities such as Mumbai, Delhi, Kolkata, and Hyderabad. The remaining orders hail from more than 200 other cities where the platform has launched its pilot programs.
Why it is Cheaper
In India, Zomato and Swiggy hold a virtual duopoly in the realm of online food delivery services. While these platforms efficiently transport food from restaurants to customers’ homes in a timely manner, they have faced criticism for their substantial “middleman cut,” which contributes to inflated prices. ONDC seeks to revolutionize this by eliminating the intermediaries between businesses and consumers, thereby reducing costs.
Challenges for Zomato and Swiggy
Despite their success, Zomato and Swiggy face challenges of their own. Both platforms have been criticized for their high commission rates, which can be burdensome for restaurants, particularly small and independent ones. They also face operational challenges, including ensuring timely deliveries and maintaining the quality of service as they continue to expand.
It’s Not an App
It’s important to note that ONDC is not merely an application or service; rather, it is a government-developed platform. This platform serves as a bridge, digitally connecting businesses with their customers. At present, there are several esteemed partners associated with ONDC, including Paytm, Meesho, Magicpin, Mystore, Craftsvilla, and Spice Money. These partners function as online storefronts, allowing users to conveniently order food and various other products from businesses listed on the ONDC platform.
Future of ONDC
ONDC is still in its early stages, but it holds immense promise for Indian e-commerce. As ONDC continues to evolve, new trends and practices are likely to emerge.
Here’s a glimpse into the future of ONDC:
Global Expansion: As the digital commerce landscape continues to evolve, ONDC is poised for global expansion. With a vision to bridge the gap between businesses and consumers across the globe, ONDC aims to create a trusted and seamless digital commerce ecosystem. By gaining traction and establishing itself as a reliable platform, ONDC will unlock new opportunities in previously untapped markets.
Continued Technological Advancements: ONDC will leverage emerging technologies to enhance its capabilities to remain competitive in a rapidly changing market. By embracing cutting-edge innovations, ONDC will adapt to evolving trends and provide its users with the latest tools and features.
Industry Collaboration and Partnerships: Recognizing the power of collaboration, ONDC actively seeks strategic alliances and partnerships to fuel its growth and impact. By fostering knowledge-sharing and collective problem-solving, ONDC creates an environment where industry players can work together to shape the future of digital commerce.
Enhanced User Experience: At the core of ONDC’s priorities is the commitment to deliver an exceptional user experience. The platform continuously strives to improve its interface, navigation, and overall user journey. With a focus on usability and intuitive interactions, ONDC solidifies its position as the preferred choice for digital commerce.
Empowering SMEs and Entrepreneurs: ONDC remains dedicated to empowering small and medium-sized enterprises (SMEs) and entrepreneurs. By providing them with a platform to showcase their products and services, ONDC levels the playing field, enabling SMEs to compete with larger businesses.
The future of ONDC is filled with promise and potential. As it continues to revolutionize the digital commerce landscape, ONDC embraces technological advancements, fosters collaboration, and prioritizes user experiences. analysis and interpretation of vast amounts of data. By connecting businesses and consumers worldwide, ONDC creates a borderless digital commerce ecosystem that transcends geographical limitations. With a focus on innovation and adaptability, ONDC stays ahead of the curve by leveraging emerging technologies. As ONDC evolves and shapes the future of digital commerce, it paves the way for a more seamless and interconnected global marketplace.