All about the ONDC (Open Network for Digital Commerce)
Table of Contents
All about the ONDC (Open Network for Digital Commerce)
What is ONDC?
- ONDC (Open Network for Digital Commerce) is a NGO registered company under Section 8 of Company act which is established for non-profit basis by the Department for Promotion of Industry and Internal Trade (DPIIT) of the to introduce and launch the latest update which is open e-commerce platform.
- The established for this non-profit basis origination of ONDC (Open Network for Digital Commerce) are to be make the protocols for all the basic aspects of the whole chain of activities in exchange for services or Goods in the market.
- It will be same as like HTTP for details & information exchange over the google or via internet, SMTP (simple mail transfer protocol) for the exchange of emails, & UPI for payments.
- ONDC is an Indian govt backed project, which is aimed at, allow SME’s, mom-and-pop stores, and / or small merchants in parts of the country to access processes & technologies that are typically deployed or available for or by large e-commerce platforms.
Objective of Open Network Digital Commerce: –
- It is an initiative taken by the government with the aim of promoting open networks called as ONDC, which is using open prescribed specifications & open network protocols independent of any specific platform aims at promoting open networks developed on open-sourced system and methodology.
- Govt of India ONDC project main object is to curbing “digital monopolies” of large e-commerce platforms
Giant to on-board ONDC:-
- The first tech giant that on-boarded Open Network for Digital Commerce (ONDC) is . Microsoft planning to introduce social e-commercein the Indian market by way of launching a shopping application that will help Indian consumers to shop with their social circle/sellers/service providers. Consequently, it seeks to use the network to find the best pricing among retailers and vendors.
- UPI (Unified Payments Interface) is taking as a set of examples that ONDC will be the next UPI, as a consumer or small merchant people will praise ONDC and going to accept and adopt it easily like UPI(Unified Payments Interface).
- As the government is hoping that it will democratize e-commerce and give merchants enter to the technology and system that currently only two giants are enjoying which is AMAZON & FLIPKART.
- Payment Companies like Phonepe & Paytm have already joined hands with ONDC.
Importance of ONDC:-
- Open Network for Digital Commerce (ONDC) is a global fresh initiative to democratize the place for the Online or digital commerce market.
- These open protocols will be used for building public digital infrastructure in the form of open registries and open network gateways to allow the exchange of information between merchants and consumers.
- Service providers and service holders will be able to use any useful and affordable application of their own choice for the communication of information and carrying out transactions over the ONDC (open network for digital commerce) platform.
- Consequently, ONDC goes beyond the current platform-centric digital commerce model where the merchants & consumers have to use the common application or site to be digitally connected & have a business transaction. ONDC protocols will enhance the standard of operations.
- Hence, small merchants will be able to use any ONDC application and site for smooth transactions instead of only being governed by specific platform-centric policies.
- ONDC will also reinforce the easy adoption of digital means by those currently not on digital commerce networks.
- ONDC will provide multiple options for small merchants to be able to explore the platform and conduct business.
Advantage of ONDC:-
- It is having the expectation from ONDC to make E-Commerce more inclusive and accessible for ONDC Indian as well as global consumers.
- ONDC consumer can potentially explore any products or services by using any affordable and compatible platform or application, which will give consumers the freedom to choose products from their own choice from the available bunch of same products from different brands and available quality at their preferred local businesses. ONDC would standardize promote, operations, drive efficiencies in logistics, inclusion of local suppliers, and lead to increase a value for clients.
- The digital market will be widened to accommodate more small traders in the India.
- ONDC will provide efficiencies in logistics and lead to the enhancement of value for consumers.
- The monopoly of large e-commerce companies will lead to broke and lead to improve in innovation, access, & variety of businesses. ONDC will provide standards to operations and promotes in addition of local suppliers.
Issues or Concerns related to ONDC:-
- The small merchants might be possibility to find difficulties in competing with the large number of available resources to e-commerce giants like Amazon & flipkart.
- There might be a chance of conflict in the payment gateway because of different platforms may compromise the aim of a seamless transaction
- Less knowledge of technology to small business traders may hamper the aim of implementation of this ONDC scheme.
- The taxation and legal compliance & its functional aspects of ONDC is yet to disclose & unclear,
Future of ONDC:-
- The Open Network Digital Commerce objective is to raise e-commerce penetration in the next two years to 25% of India’s consumer purchases, from nearly 8% now, in a country of 1.35 billion people.
- ONDC aims to sign up 900 million Purchaser & 1.2 million all kind of sellers on the shared this network within the upcoming 5 years while total a gross transaction value of $48 billion.
- Indian Govt. aims to come up in logistics firms & others who can add or collaborate with sellers to deliver products to clients.
- The govt also required to make sure that ONDC complies with the Information Technology Act and related laws along with CCI anti-competitive fair practices.
WAY FARWARD:-
- Indian Govt initiative required to address the lack of digital education & improve that by providing various digital literacy mission of government. Introducing user-friendly interface & various languages may important accommodate for both service provider and service holder which will help enhance their livelihoods.
- Grievance redressal mechanism one window required to be established to deal with both supply & demand issues.
For details related to the topics contact us India Financial Consultancy Corporation Pvt Ltd, a team of professionals and expert CA CS in Delhi.
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