The global e-commerce giants Amazon and Flipkart which are already facing a range of problems like the ongoing antitrust probe, a proposed prohibition on flash sales, and perennial opposition from various traders’ bodies are once again going to face heat in the Indian Market as India plans to develop Open Network for Digital Commerce (ONDC).
Both Major e-commerce giants who were ambitious to dominate India’s $800 billion retail markets will soon face a reality check as India’s commerce ministry looks to ‘end monopolistic practices’ in digital commerce.
The commerce ministry initiative of ONDC is aimed to promote open networks for all aspects of the exchange of goods and services over digital or electronic networks.
It is based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.
The Govt claims that ‘as UPI is to the digital payment domain, ONDC is to e-commerce in India.’
Aimed to democratize digital commerce and move it from a platform-centric model to an open-network model, the ONDC will work for both products and services, Union Commerce and Industry Minister Piyush Goyal says.
Working of ONDC
ONDC will go beyond the current platform-centric digital commerce model where the buyer and seller have to use the same platform or application to be digitally visible and do a business transaction.
“The foundations of ONDC are to be open protocols for all aspects in the entire chain of activities in exchange of goods and services, similar to hypertext transfer protocol for information exchange over the internet, simple mail transfer protocol for the exchange of emails and unified payments interface for payments,” the ministry said.
“These open protocols would be used for establishing public digital infrastructure in the form of open registries and open network gateways to enable the exchange of information between providers and consumers. Providers and consumers would be able to use any compatible application of their choice for the exchange of information and carrying out transactions over ONDC.”
On measures needed to design and to accelerate the adoption of ONDC, a 9-member advisory council is advising the Government of India. The advisory council is mandated to help digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiencies in logistics, and enhance value for consumers.
The advisory council includes R.S. Sharma, CEO, National Health Authority, Nandan M. Nilekani, non-executive Chairman of Infosys, Adil Zainulbhai, Chairman, Quality Council of India, Anjali Bansal, Founder & Chairperson, Avaana Capital, Arvind Gupta, Co-founder & Head, Digital India Foundation, Dilip Asbe, MD & CEO, NPCI, Suresh Sethi, MD & CEO, NSDL e-Governance Infrastructure Ltd, Praveen Khandelwal, Secretary-General, Confederation of All India Traders and Kumar Rajagopalan, CEO, Retailer Association of India.