Home » What is ONDC? Is it the Future of E-Commerce in India?

What is ONDC? Is it the Future of E-Commerce in India?

ONDC has been the buzzword on social media quite recently. Almost everyone is talking about this and actively sharing reels and screenshots of their orders on social media comparing it with other delivery platforms. However, what is ONDC? This blog will answer the question.

What is ONDC: Meaning & Definition

ONDC is an open network built to democratize e-commerce for buyers and sellers across platforms. It is a not-for-profit organization established by the Department for Promotion of Industry and Internal Trade (DPIIT).

ONDC was incorporated on 31 December 22 and falls under the Government of India. The goal of ONDC is to provide equal opportunity for all e-commerce participants, whether they’re buyers or sellers. 

The network aims to serve as a common point of interest for all supply chain participants, logistics, and operations from around the country, in turn leading to higher participation and growth in the e-commerce industry.  

How ONDC Works?

Think of a marketplace where buyers and sellers come to transact. Every buyer has a different preferred application while sellers themselves are separate entities. ONDC is the common gateway that will connect them. 

In fact, ONDC will serve as a thread that will match those buyers and sellers to each other, helping with price discovery, accessibility, locations, product choices, and much more.

Buyer platforms will be accountable for buyers’ choices from different zones. Buyers can simply log in and search for their desired products. 

Seller platforms are responsible for onboarding merchants and listing their products. The merchants will be responsible for logistics and operations.

In sum, ONDC is the marketplace that acts as a gateway, where buyers and sellers from different platforms will have a unified connection to exchange goods and services. Think of it as bringing apples and oranges together. 

ONDC Vs Flipkart Vs Amazon

You must have used e-commerce platforms such as Amazon or Flipkart. These platforms onboard sellers, merchants, and other entities who have various products to offer to consumers. 

Sellers have to pay a commission to e-commerce platforms while buyers have to pay delivery fees or subscription fees. While medium to large retailers may not have a problem with the commissions, small enterprises have to sacrifice a chunk of their margin. 

Based on ONDC’s proposition, it has the potential to level the playing field by allowing small retailers to sell groceries, clothes, or other utility businesses and host their products. 

The government claims that the merchants can access the ONDC platform at less than half of the charges they pay to access Flipkart or Amazon. ONDC claims that the market forces will decide the fee/commission charged and not any single entity.

The platform hosts both buyer and seller apps, whereas Amazon and Flipkart are both sellers’ and buyers’ platforms in one place. If the project is successful, many retailers will have the opportunity to sell their products online and be a part of the overall ecosystem.

ONDC India App Explained

You know now ONDC hosts both buyer and seller apps to connect potential buyers and sellers. If you want to order anything in ONDC, you can download any of the buyer’s applications like Paytm, Pincode, Meesho, Magicpin, etc. 

These apps have an ONDC ecosystem built into them. For example: If you search ‘ONDC’ in Paytm, it will drive you to the ONDC network and allow you to browse products.

There are also seller applications like Mystore, eSamudaay, etc. which allow sellers to list their products and the ONDC network helps connect them with buyers. 

Initially, the services are live in some cities, and ONDC’s website gives information on the pin code the service is available. All you have to do is simply head over to any buyer’s app and type ONDC to use it.

ONDC and the Future of E-commerce in India

While ONDC has started in a promising manner with daily orders climbing the ten thousand mark in a span of days, there lies a lot of hard work to be done to revolutionize the e-commerce space in India. 

The platform boasts minimum commissions compared to others and hence, buyers and sellers see incredible potential. However, it remains to be seen how long this can be sustained.

If the platform succeeds in building the ecosystem and the technology, it can help small businesses to grow and increase the overall productivity of the country. This will also be useful for customers as they have to pay lesser charges. 

Being in its initial days, the government is also evaluating various prospects and looking to capitalize on the great opportunity. However, the future seems promising for ONDC, as it did with UPI.

Is ONDC Secure?

Yes, ONDC is a secure platform. Being a government-backed platform, ONDC gives users the experience of standardized transactions without multiple integrations and intent to use technology like blockchain for security.

The platform aims to give a user-friendly experience and emphasizes protecting the data while enforcing stricter privacy rules, much like our online stock trading app.

Conclusion

By now ONDC’s meaning must have been clear and you also know how ONDC works. The government has established this platform as a catalyst to empower small businesses to transform them into diversified opportunities for buyers and sellers. 

Based on the popularity of the ONDC India app and innovative solutions, ONDC has enormous opportunities to tap into the e-commerce market and grow exponentially.

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Shriram Shekhar

Simplifying trading & investing through meaningful content.

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