How ONDC will Drive the eCommerce Industry
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The India Government has introduced the pilot stage of ONDC (Open Network for Digital Commerce). The operations have been initiated in 5 cities across India, and the project is planned to comprise 100 Indian cities by August 2022.
With ONDC, the government’s objective is to end the domination of two USA-based eCommerce giants, Amazon and Flipkart, in the online shopping marketplace.
Let us explore ONDC with in-depth details and what business deviations it will bring into the Indian eCommerce space? We will also discover what impacts it will put on the online/offline buyers and sellers of the marketplace? We will answer all these queries in this blog post.
What is ONDC?
To be precise, ONDC will be an open platform for all eCommerce business transactions and actions around the nation. However, it will not be the only choice, but it will possibly be the most wide-ranging network.
At present, eCommerce networks are explicitly platform-centric. A purchaser and seller must exist on the same digital platform to make an online transaction. If a specific pair of socks are listed on Flipkart, the consumer will have to go on the site or mobile application of Flipkart to get the same pair of socks. So, online transactions are more itemized and platform-focused.
ONDC will transform this scenario completely. ONDC will not be an eCommerce portal or platform to sell or purchase the products. Instead, it will be a connected network on which the diverse range of sellers, purchasers, and delivery partners will list themselves.
A link between all these bodies and entities will be formed through ONDC, and thus a cross-connection will be assured to acquaint with a more extensive, unified and central marketplace.
How ONDC Aims to Upsurge eCommerce Penetration
Currently, Amazon and Walmart’s Flipkart regulate more than 60 percent of the digital marketplace across India.
ONDC will work with an objective to raise eCommerce penetration in the subsequent two years to 25 percent of India’s customer purchases, from around 8 percent currently in a nation of 1.35 billion people.
It is predicted that 900 million purchasers and 1.2 million sellers will sign-in on the shared network within the succeeding five years while accomplishing a gross merchandise value of around $48 billion.
The government bodies have evaluated that India’s eCommerce marketplace was valued at more than $55 billion in gross merchandise value in the year 2021 and will upsurge to $350 billion by the end of this precise decade.
How ONDC Aims to Enhance Competition and Promote Innovation by Startups
The Indian government says that current eCommerce platforms work in silos and are forcefully controlled and regulated, keeping out many small-sized online business players. It expects ONDC to boost competition levels and promote innovation by startups.
It also expects to bring in small and mid-sized logistics companies that can partner with sellers to deliver products to consumers.
The emphasis would be on small-sized merchants and a rural customer base, with web and mobile apps in diverse Indian languages. ONDC will be an ecosystem that will link the network to a mall with 1,000 gates rather than merely two, thereby increasing opportunities for more sellers and shaping the scenario where all businesses will receive fair treatment against major eCommerce giants.
Users will be capable of rating and reviewing service providers on the ONDC platform, which will be pertinent and noticeable across the complete network.
The Indian government says ONDC will assist in ending “predatory product pricing, particularly in higher-margin, and higher-value items”. However, Amazon and Flipkart disagree that they are involved in predatory product-based pricing scenarios.
What Immense Challenges ONDC will Face?
ONDC aims primarily to tap millions of small-sized businesses that lack technological proficiency, so the Indian government will have to operate enormous awareness programs and campaigns to onboard them, stated the Confederation of All India Traders. This big group presents around 80 million such small-sized businesses.
Smaller companies with lower volumes may even lack the resources to compete with the offers and discounts provided by giant eCommerce players such as Amazon and Flipkart.
How Can IndiaNIC Assist You?
Once you are definite to commence your digital business journey, the foremost thing you will require is an eCommerce portal and platform.
With the assistance of ONDC, you are going to display your products to a broader audience range. So, your eCommerce portal must improve the overall online shopping experience of the user base.
We at IndiaNIC offer you the backing of our professional developers, that will assist you in building your eCommerce sites, web and mobile applications for online transactions. The website and app will be created per your exact requirements to ensure an exceptional experience for you and your consumers.
Key Takeaways
ONDC is a distinct eCommerce network launched by the Indian government to support small-sized businesses in efficiently dealing with their customer base.
The platform’s prime focus is to eradicate the supremacy of two big players Amazon and Flipkart, from the eCommerce landscape and offer equal business opportunity and progress to all the online sellers and dealers.
Resulting from a network-centric tactic, ONDC will link the sellers, buyers, and delivery partners from diverse partners to each other and thus will upsurge the selections to choose from for everyone.
FAQs on the ONDC Platform
What is the term ONDC eCommerce?
ONDC is a non-profit organization whose network will facilitate the presentation of products and services online from all contributing eCommerce players and platforms in search outcomes across all applications on the network.
Can ONDC take hold of the moment in the online retail space?
The significant objectives of ONDC are to promote open networks built on open-sourced methodologies, leveraging open specifications and network protocols, and independent of any explicit platform.
Which bank acquired a 6 percent stake in ONDC?
Punjab National Bank declared it had bought a 6 percent stake in ONDC, a public digital e-commerce platform, for around Rs 10 crores.
Should a small eCommerce business be concerned regarding the ONDC platform?
Yes, a small eCommerce and even an offline business should be concerned about the ONDC platform if they desire to experience a profitable curve in their current business operations.
How ONDC will dismiss the dominance of giant eCommerce players from the roots?
To date, if your existence on online platforms were not wide-ranging, you would have been curbed by big eCommerce platforms. However, ONDC will eradicate this dominance right from the roots. No matter if you are displaying your products on other eCommerce portals or your site, as long as it is listed with ONDC, you will be promoted equally.
