Open Network for Digital Commerce, an expanded version of ONDC is an open-source network protocol backed by the Indian government enabling local commerce from different fields including travel, food, grocery order, and delivery to be acknowledged. The $80+ billion ONDC is based on an open-source methodology that aims to promote the exchange of products and services via digital and electronic mediums. Furthermore, the Open Network for Digital Commerce started with the idea of creating a UPI-like ecosystem for the e-commerce industry.

ONDC project was announced in 2020, however, the development paced up in July last year. It is a non-profit firm under section 8 of the Companies Act 2013 in which multiple companies and banks have stakes. Currently, the e-commerce ecosystem is dominated by big players like Amazon, Flipkart, and Myntra thus the evolving businesses are not getting enough recognition and sales. The government and ONDC-favoring folks strongly believe that ONDC has the potential to break the traditional purchasing practices followed by the citizens allowing emerging companies to be identified.

Functioning and Vision of ONDC

According to ONDC CEO Thampy Koshy, ONDC is currently under alpha testing in 85 cities and beta testing in two cities. With more than 5000+ merchants and 26+ participations on board, ONDC is entering the new digital era enabling the local networks to democratise the e-commerce zone and offer solutions to the global problem.

As per Koshy, “The unique features of ONDC are responsible for solving the two global problems. Firstly, something like this is attempted for the first time. Secondly, it is an initiative to solve a problem everyone is facing across the globe. In a developing nation like India, market concentration and related practices are the biggest concerns”

“The Americans are trying to develop a firm known as ‘America Innovation and Online Choice Act’. Moreover, the Europeans are also trying to develop something called the ‘Digital Market Access Act,’ both projects are based on the same global issue. Furthermore, all these eyeballs are pointed at us how we incorporate technological advancements in growing markets by staying within the policies.” Koshy added.

The clear ideology behind the Open Network for Digital Commerce is to democratise e-commerce trade in India by allowing any consumer to purchase goods or services from any vendor. These vendors include budding businesses and MSMEs. ONDC aims to break the monopoly of private performers in the e-commerce domain that have massive tech teams and marketing budgets.

Why Amazon & Snapdeal are Tieing Up With ONDC?

Recently, leading e-commerce platform Amazon and Bangalore-based startup Snapdeal shared that they have joined the central government’s flagship program Open Network for Digital Commerce (ONDC). In the beginning, Amazon’s SaaS SmartCommerce and logistics network (handling pickups, delivery, and returns) will be the couple of things that would be integrated with the non-profit company ONDC. SmartCommmerce is an Amazon-owned Web Services-powered suite of software-as-a-service (SaaS) powering MSMEs to kickstart their journey. However, “the two platforms will continuously seek better integration opportunities in the future” as stated by Amazon.

Bengaluru-based startup Snapdeal’s co-founder Kunal Bahl announced that they have already started receiving orders via ONDC. Bahl also stated that they have just joined the firm and are now receiving orders from numerous locations in the country including Indore, Ajmer, Amravati, and Gurdaspur. The top categories in which they are receiving the orders are home and kitchen products like bedsheets, towels, utensils, and serving sets. Furthermore, Snapdeal is also planning to launch on the platform from the retailer’s side with three categories – beauty & personal care, fashion, and home.

Numerous other e-commerce and tech giants including Flipkart, Hindustan Unilever, and Microsoft are willing to join this government-backed initiative. On the other hand, the already on-boarded players including Amazon and Snapdeal are extremely happy to become part of the Indian project because their vision and commitment are closely aligned with ONDCs objectives. Additionally, the motto of enabling small businesses and vendors to digitally seek customers across the country is something that the whole e-commerce pool wants.

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