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Open Network for Digital Commerce (ONDC)

Context: The Open Network for Digital Commerce (ONDC) achieved a record 8.9 million transactions in May, a 23% increase from April.

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.

ONDC
Open Network for Digital Commerce

 

About ONDC:

  1. Section 8 Company: Non-profit organization.
  2. DPIIT Initiative: Launched by the Department for Promotion of Industry and Internal Trade.

Benefits of ONDC:

  1. Sellers: Compete fairly with big players, and become discoverable online.
  2. Buyers: Seamless shopping with a wide product range in one checkout.
  3. Tech Companies: Faster product/service adoption and scalability.
  4. FinTech: Offer credit and financing to e-commerce entities.

Challenges:

  1. Resistance from established players.
  2. Transitioning offline businesses to online.

 

Source: TOI