Introduction
The e-commerce market has flourished and attained new heights in India over the years. So much so, that you can order almost everything - from a loaf of bread to a plasma, within a few clicks today. You hardly have to step out for anything. But, while it is still growing, a few giants are currently dominating the digital commerce segment.
The Open Network for Digital Commerce (ONDC) came into existence to widen the horizon. It makes the commerce environment more accessible and encourages competition and innovation. ONDC aims to level the playing field for small and medium enterprises and change the e-commerce space. In this blog, we explore how ONDC works, its benefits, and potential.
What is ONDC (Open Network for Digital Commerce)?
ONDC digital commerce in India is a non-profit initiative established on 31st December 2021. The Indian government launched this program to create an open and inclusive digital commerce space. It lets buyers and sellers interact across different platforms instead of a dominant single point.
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The open network is based on protocols that allow various e-commerce platforms to connect. This way, local commerce segments like grocery, food, mobility, hotel booking, and so on, can engage and discover each other through any network-enabled platform.
How does ONDC work?
ONDC operates as a decentralised network. It connects many e-commerce platforms, service providers, and consumers. It allows smooth transactions and connectivity across different systems. As a seller, buyer, tech company, or fintech firm, you can become a part of the revolution of the ONDC network.
You can join the ONDC platform through the following steps:
1. Sign up on the portal and explore the resources to get started.
2. Explore webinars to understand how the platform works and join communities.
3. Pick your role or domain.
4. Depending on the type of function, you can proceed to complete the integration with the platform.
5. Once you meet all the requirements, you can go live on the ONDC Network.
ONDC platform: Benefits
The multitude of benefits of the ONDC digital commerce in India are as follows:
· Empowering small businesses
SMEs and local traders who find it challenging to establish their online presence can now take part in this enormous digital marketplace. They can do so without having to build their e-commerce platforms. Such a change allows small businesses to reach a broader audience and compete with larger players, thanks to ONDC.
· Increased consumer choice
With ONDC, as a consumer, you are no longer limited to offerings from a limited number of platforms. You can now access a wide range of products and services from various platforms within the same network. With such an expanded network, you get more varieties, better prices, and improved customer satisfaction.
· Innovation and competition
By opening up the e-commerce system for firms, small and big, ONDC encourages healthy competition. This, in turn, leads to innovation. Established and budding businesses are nudged to develop unique offerings. They are also encouraged to improve their services now that they have a platform to reach more audiences. As a result, economic growth can be achieved.
· Lower transaction costs
ONDC reduces the need for intermediaries in the e-commerce process. All the sellers, buyers, local suppliers, tech companies, etc., can connect under the same platform. As a result, there are lower transaction costs for both businesses and consumers. Such a structure is particularly beneficial for small businesses that struggle with high fees on traditional e-commerce platforms.
· Support for local retailers
Local retailers can seamlessly use the many services under the ONDC platform. By enabling them to participate in digital commerce, ONDC supports and drives the growth of local economies. Plus, it reduces the carbon footprint due to long-distance shipping. Consumers can also experience enhanced convenience by buying from nearby businesses.
Current Challenges and future considerations
While ONDC advocates a massive change towards a growing economy, it is not devoid of challenges. They pertain to adoption and integration, regulation and compliance, competition with established platforms, and maintaining quality standards.
These challenges come with any new and developing initiative such as ONDC. For future considerations, the government's support and infrastructure development is critical. Programs to educate small and medium-sized businesses about the platform and its positive impact are also necessary. They help communicate the regulations and quality standards.
Conclusion
ONDC is a bold step towards creating a more inclusive digital commerce system in India. It is the way forward to replicate the success of the Unified Payment System (UPI) that has revolutionised digital payments today. Realising its potential and overcoming the minor challenges that can affect its adoption, is all it will take to get it going. As a business owner, buyer, or contributor to the platform, you can take part in this successful venture to boost your growth and convenience.
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