ONDC (Open Network for Digital Commerce) is a private non profit, section 8 company incorporated on December 31, 2021 threatening the dominance of established MNC's. With increased engagement on E Commerce platforms in our country, big tech companies like Swiggy, Zomato, Amazon and Flipkart have gained a lot of popularity. In recent days, it has become a challenge for both buyers and sellers as few delivery platforms have been levying high taxes and commissions which makes the entire order's value go up.
ONDC was designed by the government of India to develop an open e-commerce system and prevent big tech companies from violating the Consumer Protection (E-Commerce) (Amendment) Rules, 2021, due to concentration of market power.
ONDC is a private non profit section 8 company incorporated on December 31, 2021, by DPIIT(government of India). It is not a platform, an intermediary, or a regulator. It is an open network, which eliminates the need for a central intermediary and enables e-commerce expansion and innovation.
ONDC is an aggregator of all products and services. Imagine you are a customer who wants to buy groceries from a nearby Kirana store that accepts Paytm. Then you can use ONDC to order from the Kirana store network, and a third party logistics partner like Dunzo or Shiprocket will deliver it to you.
Not only groceries it allows customers to order food, buy clothes, purchase movie tickets, and order electronics with just one click. Significantly, when a person orders food via ONDC, the delivery is made directly by the restaurant, without the need to involve a third-party (like Swiggy and Zomato).
Currently, e-commerce markets are closed, platform-centric, and buyers and sellers have to be on one platform to transact. This model hinders innovation, creates major entry barriers, and creates an asymmetry between online and offline demand. As a consequence, e-commerce participation is low and has a huge potential to grow exponentially.
ONDC is not a platform-centric model. Buyers and sellers do not have to use the same application to conduct business transactions. Instead, ONDC is network-centric, where, as long as platforms and applications are connected to the open network, Buyers and Sellers can transact regardless of the platforms and applications they use. Restaurants will also have access to customers' data. It’s like the UPI of e-commerce.
It is not a separate app that can be downloaded from the Play Store. Users should go to ondc.org or any existing UPI apps such as Paytm or PhonePe to use it.
To access this government-supported network store on Paytm, you can either search for 'ONDC' in the search bar or scroll to the bottom of the home screen, where you can find ONDC. Once you do that, you will be able to view a wide range of options, including groceries, cleaning essentials, and food items. If you're specifically looking to order food from a restaurant, you can go to the ONDC Food section, where you'll find various cuisines and restaurants to choose from. Similar to other food delivery platforms, you can conveniently order your favorite food online through ONDC.
Initially, the pilot phase was launched on April 29, 2022, in five cities; New Delhi, Bengaluru, Bhopal, Shillong, and Coimbatore. According to ONDC’s official website, it is now operational in over 236 cities, including Mumbai, Pune, Noida, Kolkata, and Chennai. It claims to have over 29,000 and 3.6 million products onboarded on the platform.
The ONDC platform has garnered attention from both consumers and businesses, as it presents an opportunity to purchase products at lower prices, potentially leading to increased sales. A McKinsey report from April 2023, predicts that ONDC will increase India's digital consumption to around $340 billion USD and the number of consumers transacting digitally from 165-190 million to 450-500 million by 2030.
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