ONDC: The Game Changer in India’s E-commerce Landscape
The realm of digital commerce has truly transformed the very essence of business transactions, providing an opulent and fair marketplace for both enterprises and consumers alike. This metamorphosis has been propelled even further by the unprecedented COVID-19 pandemic, propelling online retail sales to unparalleled heights. Nevertheless, the digital commerce panorama in India has encountered numerous obstacles, such as the overwhelming influence of a select few industry giants and the absence of harmonious integration among diverse platforms. In order to confront these challenges head-on, the esteemed Department for Promotion of Industry and Internal Trade (DPIIT), under the auspices of the Government of India, has unveiled the illustrious Open Network for Digital Commerce (ONDC).
What is The Open Network For Digital Commerce(ONDC)?
ONDC, a non-profit organization established on the 30th of December, 2021, is dedicated to democratizing digital commerce within India. Its mission is to establish an interconnected, decentralized environment where both buyers and sellers can conduct transactions effortlessly, irrespective of the digital platform or application they prefer. Through the promotion of a geographically targeted, community-based digital commerce network, ONDC will empower small and medium-sized enterprises (SMEs) and local merchants to enhance their competitiveness in the digital marketplace.
The Open Network for Digital Commerce (ONDC) is a decentralized network that aims to revolutionize digital commerce by enabling secure and efficient transactions across various sectors. It leverages blockchain technology to create a transparent, secure, and scalable platform for digital commerce.
How does ONDC work?
The ONDC functions as an intricate web of interconnected networks, seamlessly linking different digital commerce platforms and applications via open network protocols.
Sellers have the opportunity to join the ONDC network by utilizing sophisticated, comprehensive seller apps like Mystore, offering a user-friendly open network India website login experience. Upon registration, sellers can showcase their products and services, ensuring visibility to prospective buyers throughout the expansive ONDC network.
Buyers, however, have the ability to enter the ONDC network via different network-enabled apps. They have the option to browse for goods and services, compare prices, and complete transactions with any vendor on the network. This seamless connectivity enables buyers and sellers to interact without limitations to one specific platform, promoting a more dynamic and competitive digital marketplace.
In the grand scheme of things participants in ONDC have been categorized into four unique roles which i’ll explain below:
- Buyer Network Participant : This role helps facilitates the connection between buyers and the ONDC network through a dedicated buyer app, taking on buyer-related tasks like customer assistance, guaranteeing a smooth shopping journey, and offering a unified checkout process for all product categories.
- Any business with a strong customer base can join ONDC as a buyer network participant.
- This can be through your existing application, a white-labelled app, voice assistant, chatbot, or any interface which can integrate with the network, and fulfil the feature requirements mentioned below.
- Buyer network participants can also choose to partner with a technology provider to create a buyer-facing interface integrated with ONDC.
2. Seller Network Participant: A Seller Network Participant plays a crucial role in linking sellers to the ONDC network by utilizing a seller application. Their responsibilities extend to transforming the seller’s catalogue into a digital format and ensuring timely payments. Moreover, they are entrusted with the task of educating sellers on the most effective e-commerce strategies to guarantee exceptional customer satisfaction and a delightful purchasing journey.
- A Marketplace Seller Node (MSN) does not produce or manufacture any inventory of its own. It acts as a marketplace to offer goods and services that are provided by sellers.
- Inventory Seller Node (ISN) is any application operated by a seller who produces or manufactures and sells its own inventory. It doesn’t include products/services by other sellers.
3. Gateway Role on ONDC: Gateways play a crucial role in the open-network ecosystem, acting as technology providers to guarantee the discoverability of all sellers within the ONDC Network. They streamline the process by forwarding search requests from buyer applications to all seller applications and vice versa, in accordance with the ONDC Network Policies. The Gateway service empowers end consumers to conduct manual searches, offering them access to pertinent product and service information from ONDC’s vast seller universe.
This lets you:
- Connect seamlessly
- Increase your reach & visibility
- Get relevant product/service information
4. Technology Service Provider: Technology Service Providers play a vital role in providing a wide array of software applications, whether as independent solutions or through cloud-based services. By acting as external software providers, TSPs facilitate smooth business operations on the network, allowing businesses to engage in e-commerce without the need for internal technological expertise. Moreover, TSPs act as catalysts in accomplishing ONDC objectives and enticing businesses of all scales to become part of the network.
This lets you:
- Streamline your business operations
- Slash in-house tech hassles
- Scale & succeed effectively
To get any of the roles above and get started visit here
ONDC has made significant progress across key sectors like e-commerce, food, transportation, and agriculture. For example, in the food sector, ONDC has enabled secure and traceable transactions for food products, ensuring consumer safety and trust.
Check out the video below to see how ONDC is revolutionizing the food sector in India! It has become a top choice for food startups, making significant changes and improvements.
In the transportation sector, ONDC has streamlined the process of booking and tracking shipments, reducing costs and improving efficiency.
ONDC Travel, Transportation & Mobility aims to build a nationwide multi-modal network that provides seamless experiences, supports growth & innovation by,
- Bringing together a diverse set of Mobility, Transportation and Travel players who can engage seamlessly between them on the ONDC Network
- Fostering collaboration, innovation & new business models
- Facilitating responsive policy through engagement with key decision-making authorities
ONDC has signed an agreement with the state transport department to set up the Kerala Open Mobility Network. More details here
The opulence of the ONDC network can be quantified through a myriad of metrics, encompassing the quantity of transactions, the cumulative value of transactions, and the multitude of network participants. Judging by these metrics, the ONDC network is experiencing an exponential surge, boasting a substantial volume of transactions and an impressive congregation of participants.
What ONDC is:
- An open network
- Eliminates the need for a central intermediary
- An enabler for e-commerce expansion
- An enabler for broad-based innovation
- Market and Community-led initiative
What ONDC is NOT:
- An application or a platform
- A central intermediary
- A medium to help digitize businesses
- A regulator
Here are some of the key startups and companies involved in building on the Open Network for Digital Commerce (ONDC) in India:
- Google Cloud India
- Antler in India
- Paytm
- Protean
- Startup India
- Punjab National Bank
- State Bank of India
- Axis Bank
- Kotak Mahindra Bank
- BSE Investments
- Central Depository Services
- ICICI Bank
- Small Industries Development Bank of India
- UCO Bank
- HDFC Bank
- Bank of Baroda
- eSamudaay
- Gofrugal Technologies
- GrowthFalcons
- SellerApp
- Yes Bank
- IDFC First Bank
- National Payment Corporation of India (NPCI)
- National Stock Exchange of India (NSE)
- Common Service Centres (CSC) under Ministry of Electronics and Information Technology (MeitY)
- Jammu and Kashmir Trade Promotion Organization (JKTPO)
- Government of Madhish Pradesh
These companies and startups are playing a crucial role in building the ONDC network and driving innovation in digital commerce in India.
The Open Network for Digital Commerce (ONDC) is a government-backed initiative in India that aims to create a universal, open, and decentralized network for digital commerce. The platform is designed to promote open standards and interoperability between different digital commerce applications, enabling consumers and businesses to discover, buy, and sell goods and services online more efficiently
As of now, ONDC is still in its early stages, and there are only a few apps that have been developed and launched on the platform. Here are some of the ONDC-compatible apps that are currently available:
1. ONDC Official Guide App: This app is designed to allow users to participate in the ONDC ecosystem with ease. It offers verified and validated information about the ONDC ecosystem, including information about its core principles, functionality, and benefits. The app also keeps users informed about the latest developments, news, and announcements related to the network.
2. Paytm: Paytm is a digital payments and e-commerce platform that has integrated the ONDC network. Users can access the ONDC store on the Paytm app and browse through a variety of options ranging from groceries and cleaning essentials to the food store. If you are trying to order food from a restaurant, head over to ONDC Food and check out the cuisine that you are trying to order.
3. Meesho: Meesho is an e-commerce platform that has integrated the ONDC network. Users can access the ONDC store on the Meesho app and browse through a variety of options ranging from fashion and accessories to home decor and electronics.
4. Dunzo: Dunzo is a delivery and logistics platform that has integrated the ONDC network. Users can access the ONDC store on the Dunzo app and browse through a variety of options ranging from groceries and household items to electronics and gadgets.
5. Craftsvilla: Craftsvilla is an e-commerce platform that specializes in ethnic and traditional Indian products. It has integrated the ONDC network, allowing users to access the ONDC store on the Craftsvilla app and browse through a variety of options ranging from clothing and accessories to home decor and handicrafts.
Blockchain meets ONDC
A public blockchain can potentially improve order volume on the ONDC network by providing a decentralized and transparent platform for transactions. Here are some ways in which a public blockchain can help:
- Decentralization: A public blockchain is a decentralized platform that is not controlled by any single entity. This means that the ONDC network can operate independently of any centralized intermediaries, reducing the cost and complexity of transactions. This can encourage more businesses to join the network, leading to an increase in order volume.
- Transparency: A public blockchain is a transparent platform that allows all participants to view and verify transactions. This can help build trust and confidence in the ONDC network, encouraging more buyers and sellers to participate. This can lead to an increase in order volume as more people feel comfortable using the platform.
- Security: A public blockchain is a secure platform that uses advanced cryptographic techniques to ensure the integrity and confidentiality of transactions. This can help protect buyers and sellers from fraud and other security risks, making the ONDC network a more attractive platform for transactions.
- Automation: A public blockchain can automate many of the processes involved in transactions, such as payment processing and order tracking. This can help reduce the time and effort required to complete a transaction, making the ONDC network a more convenient platform for buyers and sellers.
- Interoperability: A public blockchain can enable interoperability between different blockchain networks, allowing the ONDC network to connect with other blockchain-based platforms and services. This can help expand the reach and scope of the ONDC network, leading to an increase in order volume.
In summary, a public blockchain can improve order volume on the ONDC network by providing a decentralized, transparent, secure, automated, and interoperable platform for transactions. By leveraging the benefits of blockchain technology, the ONDC network can become a more attractive platform for buyers and sellers, leading to an increase in order volume and growth in the digital commerce ecosystem.
Here are some specific ideas that hackathon participants can build over and above those listed with the prize track with regards to ONDC:
- Smart Contracts for Automated Order Fulfillment: Participants can build smart contracts that automate the order fulfillment process on the ONDC network. For example, a smart contract could automatically trigger the payment process once the order is confirmed, or automatically send a notification to the seller once the payment is received.
- Decentralized Marketplace for NFTs: Participants can build a decentralized marketplace for non-fungible tokens (NFTs) on the ONDC network. This can enable artists and creators to sell their digital assets directly to buyers, without the need for intermediaries.
- Supply Chain Tracking and Traceability: Participants can build a supply chain tracking and traceability system on the ONDC network. This can help buyers and sellers track the origin and movement of products, ensuring transparency and accountability in the supply chain.
- Decentralized Identity Management: Participants can build a decentralized identity management system on the ONDC network. This can enable buyers and sellers to manage their digital identities securely and privately, without the need for centralized intermediaries.
- Cross-Chain Interoperability: Participants can build a cross-chain interoperability solution that enables the ONDC network to connect with other blockchain networks. This can help expand the reach and scope of the ONDC network, enabling buyers and sellers to access a wider range of products and services.
- Data Analytics and Insights: Participants can build data analytics and insights tools that help buyers and sellers make informed decisions on the ONDC network. For example, a tool could provide insights on popular products, seller ratings, and market trends.
- Integration with IoT Devices: Participants can build solutions that integrate the ONDC network with Internet of Things (IoT) devices. For example, a solution could enable buyers to order products using voice commands through smart speakers, or enable sellers to track inventory levels using smart sensors.
In conclusion, while ONDC’s protocol-based approach to decentralizing e-commerce has the potential to revolutionize the industry, it is crucial to understand the economics of protocols and open networks to unlock its full potential. The unbundling and interoperability that ONDC offers can increase coordination costs, and the more layers that are unbundled, the higher these costs can become. Moreover, the degree of variability in use cases that a protocol needs to directly coordinate also plays a significant role in its ability to absorb coordination costs. To improve ONDC’s effectiveness, efforts can be made to reduce coordination costs or the variability in use cases supported. By addressing these challenges, we can help ONDC move up the protocol effectiveness spectrum and achieve its goal of reorganizing the commerce ecosystem.
Thank you for reading!
