Post Date : May 12, 2022
The Open Network for Digital Commerce (ONDC) is India’s ambitious initiative which will help local commerce across segments, such as mobility, grocery, food order and delivery, hotel booking and travel to reach and engage more people through a network-enabled application. It is being pitched as a solution to do away with the dominance of large E-commerce organisations. However, according to the latest news from ET, E-com majors in India like Flipkart, Amazon and Reliance Retail are all set to get on board with ONDC even as the network’s pilot programme to on-board kiranas and small and medium businesses gets underway in Bengaluru and four other cities.
While Paytm is already a part of ONDC along with Dunzo (Reliance backed) and Ekart (Flipkart’s logistics arm) integrated with it for logistics services, Reliance and Walmart owned PhonePe is in the process of joining the network. Paytm and PhonePe will reportedly offer space to ONDC on their respective portals, through which the users can login to the network.
According to sources, “The bigger e-commerce players have indicated to ONDC that they will support it. Besides tapping into new users, this will also enable platforms with sizeable B2B verticals to tap into the seller side of ONDC network to supply goods.”
The existing large etailers work with a captive set of users. With an open network, ONDC will enable all the buyers in the network to be discoverable to all the sellers. Therefore, existing platforms (too) will have an incentive to be part of ONDC.”Thampy Koshy, CEO, ONDC
On similar lines as the aforesaid organisations , Amazon is also in the process of getting to know the basics of ONDC to propose a model and see how their collective operations can be integrated with each other. “Key logistics (providers) are already there. Now, they are waiting for orders and want to see how it is executed,” another person aware of the integrations said.
Although the project is in the beta testing phase with 5 sellers & limited buyers onboard, ONDC aims to spread its wings to about 75-100 Indian cities by August this year. The network aims to on-board small sellers and some expect it to have the impact on E-com similar to what the Unified Payments Interface (UPI) had on digital payments. It is a “decentralised” play without the need for customers and sellers to be on one platform.
“The open protocol enables discovery, ordering, execution, fulfilment, and post-fulfilment without mandating the provider and consumer to come to the same platform,” says a strategy paper issued by ONDC
As far as the operating model of ONDC is concerned, the network will be a sort of meeting point for the buyers as sellers. The seller can either use his/her own logistics to ship the product to the customer or the customer can be told to Dunzo it (like other tasks performed on the app). As per the critics, the effectiveness of ONDC will depend on how the operating model is executed, though most of those part of ONDC are excited about how all of it plays out. “Especially, when there is a dispute between consumer and the seller on orders. What role does the logistics partner have in this case? These are many questions that need to be answered once it is opened to the public,” an executive said.
“There are still some teething issues which will only be visible once the execution starts,” said a seller aware of ONDC’s work. “There is no clarity yet on how the cataloguing will be done or how the advertisement technology, which Amazon does really well, will work out in ONDC. I will definitely be a part of it, because I don’t want to miss the bus in case the technology takes off.”
Credits: Economic Times