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Open Network for Digital Commerce (ONDC)

GS3/GS2

 Syllabus: E-Commerce/ Governance

 

Source: TH

 Context: The article analyses the advantages and challenges of adopting an Open Network for Digital Commerce (ONDC) in India.

 

What is ONDC?

 The Open Network for Digital Commerce (ONDC) is a government initiative aimed at transforming the e-commerce market in India by shifting from a platform-centric model to an open-network model.

 

Similar to the success of the Unified Payments Interface (UPI) project, which enables seamless money transfers across different payment platforms, the ONDC seeks to facilitate transactions between buyers and sellers regardless of the platforms they are registered on.

 

Explanation using an example:

Let’s imagine you want to buy a product online, like a smartphone. You are registered on Amazon, but you find a better deal on Flipkart for the same smartphone you want to buy. In the current system, you wouldn’t be able to purchase it from Flipkart because you’re not registered there.

But ONDC is like a big network that connects all the different e-commerce platforms together. So instead of being limited to one specific platform, you can buy products from different platforms, even if you are registered on only one of them.

 

Objectives of ONDC: Democratization and decentralization of e-Commerce; Inclusivity and access for sellers; Increased choices and independence for consumers and making goods and services cheaper.

 

Benefits and Challenges of ONDC:

Benefits of ONDCChallenges of ONDC
Level Playing Field for e-commerce operatorsTechnological Complexity of Implementation
Wider digital market access for MSMEs and tradersCustomer switching from established platforms— a loss for established e-commerce companies
Drives competition and innovation in various sectorsLimited benefits as sellers are already free to list their products across various e-commerce platforms even in today’s platform-centric e-commerce model.
Increased freedom of choice for consumers—”Democratise e-commerce” and “provide alternatives to proprietary e-commerce sites”.Limited benefits as services such as price-comparison that are offered by various private websites, already bridge the information gap and help buyers make better decisions.
Creates a neutral and regulated platformLack of clarity on addressing customer complaints and returns
Promotes openness, interoperability, and innovationMajor e-commerce players like Amazon and Flipkart hesitate to join ONDC due to loss of control, existing dominance, competitive disadvantage, infrastructure challenges, and control over pricing/policies.
Enhances transparency and accountability

 

The way forward and Conclusion:

The success of the Open Network for Digital Commerce (ONDC) will depend on how efficient the listing of products from various sellers is and maintaining the quality of services. The government needs to focus on building a better digital space, implementing a digital education policy, conducting a well-funded adoption campaign, and providing a secured single window for issue resolution.

 

Insta links:

Open Network for Digital Commerce (ONDC)

 

Mains Link:

Discuss the significance of ONDC. (150 Words)

 

Prelims Links:

Consider the following: ( UPSC 2022)

  1. Aarogya Setu
  2. CoWIN
  3. DigiLocker
  4. DIKSHA

 

Which of the above are built on top of open-source digital platforms?

(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) 1, 2, 3 and 4

 

 

Ans: D