BusinessEducationFinance

What is ONDC, India’s Project for an Open E-Commerce Network?

India, with its vast population of 1.35 billion people, is witnessing rapid growth in the e-commerce sector. To promote fair competition and reduce the dominance of global giants like Amazon.com and Walmart's Flipkart, the Indian government launched the Open Network for Digital Commerce (ONDC) in April. This non-profit company aims to create an open e-commerce network that will revolutionize the way products and services are displayed and accessed across various platforms and apps.

The Vision of ONDC

ONDC’s primary objective is to increase e-commerce penetration in India from its current 8% to an ambitious 25% within the next two years. By integrating all participating e-commerce platforms, ONDC enables users to view products and services from various platforms within a single app. For instance, if Amazon and Flipkart integrate with ONDC, a user searching for a Bluetooth headset on Amazon would also see results from Flipkart on the Amazon app. This collaborative approach ensures a diverse range of options for consumers, fostering healthy competition and empowering small businesses.

Driving E-commerce Growth

With an aim to drive significant e-commerce growth, ONDC aspires to have 900 million buyers and 1.2 million sellers on its shared network within the next five years. It also envisions achieving a gross merchandise value of $48 billion. India’s e-commerce market was valued at over $55 billion in gross merchandise value in 2021 and is expected to reach $350 billion by the end of the decade. Currently, Amazon and Flipkart dominate the market, holding more than 60% of the share.

Boosting Competition and Innovation

One of the key goals of ONDC is to break down existing silos in the e-commerce industry and promote healthy competition. The government believes that the dominance of major players restricts the entry of small businesses and stifles innovation. By providing a level playing field, ONDC encourages start-ups and small merchants to participate actively. It also intends to involve logistics firms and other collaborators to enhance the efficiency of product delivery to customers.

The focus of ONDC extends beyond urban areas, with an emphasis on empowering rural consumers and small merchants. The platform supports apps in regional Indian languages, making it accessible and user-friendly for a diverse population. By increasing competition, ONDC aims to eliminate preferential treatment of selected sellers, a common concern raised against major e-commerce companies. Additionally, users will have the ability to rate service providers on ONDC, creating a transparent ecosystem.

Addressing Challenges

ONDC faces several challenges in its mission to empower small businesses and promote fair competition. One significant hurdle lies in bridging the technological gap that exists among millions of small businesses. Many of these businesses lack the necessary expertise to leverage digital platforms effectively. To overcome this, the government plans to conduct a comprehensive awareness campaign to educate and onboard small businesses onto the ONDC network.

Another challenge is posed by the discounts offered by major e-commerce players like Amazon and Flipkart. Smaller businesses with low sales volumes may struggle to match these discounts due to limited resources. However, ONDC aims to provide an inclusive environment for all businesses, regardless of their size. By creating a network of collaboration and innovation, ONDC hopes to empower small businesses and level the playing field.

Conclusion

The Open Network for Digital Commerce (ONDC) is India’s ambitious project to establish an open e-commerce network that fosters fair competition, empowers small businesses, and expands e-commerce penetration in the country. By integrating multiple e-commerce platforms, ONDC aims to provide users with a diverse range of products and services, regardless of the app they are using. With its focus on small merchants, rural consumers, and regional language support, ONDC aims to create an inclusive and transparent ecosystem. Although it faces challenges in terms of technological awareness and competition from established players, ONDC’s vision of a thriving and equitable e-commerce landscape in India holds great promise for the future.

What's your reaction?

Leave A Reply

Your email address will not be published. Required fields are marked *