The open-source network, ONDC (Open Network for Digital Commerce), establishes a level playing field in e-commerce for millions of Indian small and medium-sized enterprises.
With increased access to the internet and smartphones, more Indians are now able to purchase online. There will be 210 million internet shoppers in 2021, up from 75 million in 2015. To stay up with the shifting purchasing habits of digital-first natives, e-commerce offers enormous economic prospects.
E-commerce has revolutionized the retail business paradigm, propelling the industry to unprecedented double-digit post-Covid growth. To remain competitive, more firms are embracing e-commerce. Over 70% were from small towns after the 2020 shutdown.
The Indian government’s Open Network for Digital Commerce (Open Network for Digital Commerce) initiative is a step in the right direction towards achieving the transformational power of e-commerce and further aiding the small and medium-sized business segment. Open Network for Digital Commerce will democratize e-commerce by leveling the playing field for SMEs and micro-businesses.
Open Network for Digital Commerce is a government program that promotes open-source networks for all elements of e-commerce, allowing consumers and sellers to shift away from the existing platform-centricity.
Open Network for Digital Commerce is a positive start towards preventing monoliths.
Open Network for Digital Commerce makes use of open-source protocols to avoid monopolies in the e-commerce environment. Most Kirana stores lack technological expertise, placing the Indian retail system’s backbone at a disadvantage in a platform-centric e-commerce model. Open Network for Digital Commerce will foster fair competition by granting them access to procedures and technology commonly used by big e-commerce platforms. As more of these vendors go online, their digital exposure and reach across the e-commerce network will grow.
Open Network for Digital Commerce may further assist small business owners by lowering their online business expenses by standardizing inventory management, order management and fulfillment, and other activities.
Open Network for Digital Commerce can prevent deep discounting, predatory pricing, collusion, and inventory-owning practices in e-commerce by using open-source protocols for product cataloging, vendor matching, and price discovery.
Open Network for Digital Commerce can help to create a more inclusive e-commerce environment.
Open Network for Digital Commerce will transition the e-commerce ecosystem from an operator-driven platform-centric paradigm to an interoperable decentralized network powered by facilitators. Everyone will have equal access to opportunity.
Sellers will be able to enter digital marketplaces without having to make huge expenditures. Because value creation will not be confined to huge platforms, the representation of local start-ups in e-commerce may grow.
With more merchants being digitally accessible, Open Network for Digital Commerce will provide customers with additional purchasing alternatives at a variety of pricing points. Open Network for Digital Commerce will also allow consumers to pick their favorite local companies by matching demand with the nearest accessible supply.
Open Network for Digital Commerce’s digitization of the whole value chain would not only standardize processes, but would also eventually encourage local supplier involvement, reduce digital monopoly, create logistical efficiency, and increase customer value.
Open Network for Digital Commerce plans to bring the e-commerce ecosystem together.
Several people have already joined the Open Network for Digital Commerce network. More digital payment participation that provides a smooth, quick, and pleasant user experience is required to boost the Open Network for Digital Commerce conversion.
Pilots are now underway in Delhi, Bengaluru, Coimbatore, Bhopal, and Shillong; Open Network for Digital Commerce is planned to be implemented in 75-100 locations across India this year.
It aims to sign up 900 million customers, 1.2 million vendors, and $48 billion in gross merchandise value (GMV) during the next five years. In 2020, the GMV of India’s e-commerce business was $38 billion. It is expected to grow to $140 billion by 2025 and $350 billion by 2030.
With its far-reaching influence, ONDC will change e-commerce.
ONDC offers the prospect of transforming the Indian e-commerce business scene by establishing a level playing field for all businesses to coexist and gain mutually. For starters, ONDC will empower consumers, sellers, and logistics service providers with endless visibility and discovery options.
Furthermore, by serving as the seller’s passport to travel everywhere on the network, ONDC will save the seller and e-commerce platform money on discrete onboarding at specific marketplaces. By connecting content and commerce, ONDC can change the advertising paradigm away from impressions and towards transactions, lowering customer acquisition expenses. Increased demand awareness can minimize logistical costs, which can be as high as 10% of GMV.
Businesses will be able to gain analytical actionable insights into marketing their products across digital platforms as ONDC allows access to consumer data. ONDC may eventually go worldwide. ONDC can assure uniformity across an online shop, regardless of the existence of a large number of sellers (domestic or cross-border), by announcing an advanced standardized framework for the global e-commerce ecosystem to embrace.
Conclusion
ONDC is a great initiative. I would like to think and hope that one day in the near future, we can also have an open-source created for all e-commerce, for the benefit of all consumers, sellers, and logistics service providers in the world.
Allowing greater interoperability and promoting the use of open standards is essential to ensure a successful and sustainable e-commerce ecosystem. By using open-source platforms, we can develop and deploy solutions with potential cost benefits, while also reducing technical IT security risks.
The only question that remains is whether ONDC will be able to change e-commerce by the time of its 5-year mark. If it does, it will have done an equal amount of work as the other initiatives that have already been established to transform e-commerce around the world.
